Shenzhen banks lower mortgage rates
- Asian Market
- 2 months ago
Shenzhen’s mortgage rates have started a downward spiral, signalling that the strict property controls holding house prices in check in mainland China’s biggest cities are finally relaxing.
Some of its banks have tentatively lowered their borrowing costs for homeowners in the last few days, making Shenzhen the first of China’s so-called tier-1 cities to bring down the prohibitively expensive rates.
Average mortgage rate for first-time buyers in Shenzhen declined to 5.46% from 5.57% a month ago, additionally other cities may very well follow suit.
The rate for second-home buyers edged down 6 basis points to 5.74%, however, in recent days, the rate offered by some banks has dropped even further.
China Merchants Bank’s branches in Shenzhen are now offering rates as low as 5% above the national benchmark rate, down from 10% two days ago, meanwhile, the benchmark interest rate, set by the people’s Bank of China, is 4.9%, meaning China Merchant Bank’s new rate is 5.14%, down from 5.39%.
CITIC Bank, China's seventh-largest lender in terms of total assets, is offering a rate 8% higher than the benchmark, down from 10 per cent before, while for second-home buyers it can be as low as 12% – depending on the borrower’s credit history – from 15% before.
Within the last six months Beijing has given local authorities more control over their own property markets.
Source: Smart Trend Team