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China banks offer mortgage discounts for new buyers-report
April 12, 2012 / 2:20 AM / in 6 years

China banks offer mortgage discounts for new buyers-report

SHANGHAI, April 12 (Reuters) - Chinese banks are offering first-time home buyers discounts on mortgage-interest rates, in a partial return to supportive measures in place before the government instituted tough restrictions to cool its overheated property market, state media reported on Thursday.

Both Chinese and foreign-invested banks in cities including Beijing, Shanghai and Guangzhou, are offering discounts of 10 to 15 percent off the benchmark mortgage rate to qualified buyers who do not already own a home, the China Securities Journal reported, citing an unnamed industry source and unnamed bank branch managers.

The article did not specify if the shift is a response to a specific policy change by Chinese authorities, who often use informal “window guidance” to banks to guide lending practices.

Though the move does not signal a comprehensive lifting of property restrictions that have pressured prices and hit developers’ profits since last year, it does indicate flexibility by the government.

In particular, authorities appear keen to support first-time home buyers, while clamping down on speculation.

The property sector accounted for 13 percent of China’s gross domestic product in 2011.

In response to soaring prices, Beijing has rolled out an array of measures since late 2009 to rein in property speculation and has won some success. House prices have fallen from record highs.

But China’s vows to keep its property curbs in place have fuelled worries that they may further drag on an economy that is already cooling and saddle banks with more bad loans.

Reporting by Gabriel Wildau; Editing by Jacqueline Wong

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