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Chinese real estate agencies see uptick in potential home buyers as mortgage rates drop(Global Times) 11:09, February 24, 2022
Following recent cuts in home mortgage rates in many cities across China, more people are visiting real estate agencies and transactions are expected to rise, following a recent drop, according to industry insiders.
"It's a good time to buy," a real estate agent based in Chaoyang district, Beijing told the Global Times on Wednesday, noting that with mortgage rates going down, more people are ready to buy, meaning fewer apartments will be available and prices are expected to rise.
Some cities in China have lowered mortgage rates and down payment requirements. The latest move came on Monday in Guangzhou, South China's Guangdong Province, where branches of six major state-owned banks lowered their mortgage rates, the second time rates were cut in 2022, the Shanghai Securities News reported.
The interest rate for first-time homebuyers in the city fell 20 basis points (bps) to 5.4 percent.
As the real estate market has not returned to its normal boom, there's room for further downward adjustments, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times.
Lower mortgage rates and down payment requirements in some cities have created a more relaxed environment for the mortgage market.
An employee of a local bank in Southwest China's Chongqing Municipality told the Global Times on Wednesday that a number of local banks cut their down payment ratios and reduced mortgage rates for home buyers.
So far in February, 87 cities across the country have cut mortgage rates on a monthly basis, according to a report released by property research institute Beike.
Authorities have also taken steps to stabilize property sales. The National Development and Reform Commission, China's top economic planner, issued a notice on February 18 to promote the steady growth of the industrial economy through a variety of policies.
New preferential tax and fiscal policies are included to support real estate enterprises, which will increase pre-tax deductions for equipment purchases made by micro-sized, small and medium-sized enterprises, including real estate enterprises with operating income of less than 2 billion yuan ($3.17 billion) or with total assets of less than 100 million yuan.
New home prices in January recorded a month-on-month increase for the first time since September 2021, according to official data.
(Web editor: Zhong Wenxing, Liang Jun)
