Mortgage cuts seem to help real estate
17 cities report lower interest rates for buyers following PBOC ruling
At least 17 cities have slashed personal home loan interest rates for first-time home buyers to 4.25%, which will reduce home buying costs and help spur rational housing demand, the report said. said industry analysts.
Among the 42 cities tracked by the Rong360 Digital Technology Institute, 17 cities have adjusted mortgage interest rates downward. Those cities passed rates as low as 4.25% for first-time home purchases and 5.05% for second-home purchases between May 20 and Wednesday, Securities Daily reported.
Additionally, at least six other cities have cut their mortgage rates for first-time home purchases to less than 4.6%, and second homes in at least 24 cities can charge a rate of 5.05%, the report adds.
The personal mortgage rate cuts are in response to the central bank’s adjustment to the benchmark market-based lending rate on May 20, and it’s considered one of the biggest lending prime rate cuts in five. years (LPR) since the scheme was reformed, according to industry experts.
According to the National Interbank Funding Center, which is authorized to disclose the rates set by the country’s central bank, the People’s Bank of China.
On May 15, the PBOC and the China Banking and Insurance Regulatory Commission announced in a joint statement that, based on the corresponding tenor of the benchmark LPR, first-time home buyers can benefit from interest 20 basis points lower than commercial bank home loans.
The five-year LPR reduction will lower home loan costs for buyers because they can pay less mortgage interest each month, said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.
Taking a 30-year fully amortized loan of 1 million yuan for example, the monthly payment will decrease by about 207 yuan as the interest rate is lowered from 4.6% to 4.25%, according to Yan’s calculation. .
Differentiated mortgage interest rates, along with various policies being introduced from city to city, should help unleash rational demand, Yan said.
Chen Wenjing, deputy director of research at the China Index Academy, said market confidence would be boosted and expectations would be heightened.
There is still plenty of room to cut local lending rates, and more local governments will follow suit in the future, with the majority – except for first-tier cities and large second-tier cities rank – likely to fix their home loan rate at the low end of the required level.
As of Thursday, housing regulation measures were announced up to 93 times in May, and housing market-related policies have been announced more than 210 times in more than 120 Chinese cities this year, according to chief analyst Wang Xiaoqiang. at Zhuge Real Estate. Data Research Center.
On Sunday, Yibin in Sichuan Province announced that it will provide a maximum of 30,000 yuan in home purchase subsidies to families with specific requirements, and families with three children can apply for a subsidy. additional 30,000 yuan for buying a house, ThePaper.cn reported.
On Monday, Meishan, also in Sichuan, pledged to subsidize a maximum of 600 yuan per square meter for the purchase of a house for talented residents, the city’s official website said.
Thanks to the easing measures, the housing market has recently shown signs of stabilization, Wang said.