March 5, 2012 / 12:31 AM / in 6 years

Chinese banks offer lower rates for first-home buyers: report

SHANGHAI (Reuters) - Chinese banks have begun offering preferential loan rates for first-home buyers, the official China Securities Journal said on Monday, signaling that Beijing is relaxing its grip on the property sector after a near two-year clampdown.

The move came after a statement by the People’s Bank of China last week that the country’s big four state-backed lenders would issue more loans to qualified property developers in order to boost entry level housing supply -- suggesting that major banks are ready to ratchet up real estate lending.

Bank of China Ltd, one of the country’s big four lenders, along with medium-sized Huaxia Bank are now offering a 10 percent discount on loans for first home buyers, and Agricultural Bank of China Ltd 5 percent, the newspaper said, quoting unnamed banking sources.

However, the paper said that there were still no signs the government was ready to ease other property restrictions, including a requirement for non first-home buyers to pay cash for at least 30 percent of the total value of a new home.

Since April 2010, China has restricted bank lending to the real estate sector and limited citizens’ ability to buy multiple homes or homes in other cities, in a bid to curb speculation as prices in key cities doubled between mid-2009 and the end of 2010.

Beijing has repeatedly vowed to keep the control measures and bring home prices back down to what Premier Wen Jiabao has described as a “reasonable level,” but some property developers, local governments and banks have tried to skirt the rules.

Reporting by Lu Jianxin and Fayen Wong; Editing by Jonathan Hopfner

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