Guangzhou goes below PBOC rate

Guangzhou has lowered the interest rate floor of mortgage loans for first-time home buyers by 10 basis points below the related policy rate to 4.1 percent, the first Chinese tier-one city to do so, mainland media reported.

Though there's been no official announcement, the capital city of Guangdong province had relaxed its policies a week ago, taking the lead to treat buyers of second homes the same way as first-time buyers, as long as no home was bought in the city previously.

According to mainland media, Guangzhou set the lowest interest rate of mortgage loans for first homes at 10 basis points below the five-year loan prime rate, currently at 4.2 percent. But the downpayment ratio floor for the first home stayed unchanged at 30 percent, missing market expectations.

The mortgage-related LPR set by the People's Bank of China stands at 4.2 percent, after three cuts since 2022 in a bid to boost the ailing property market.

The city also reduced the downpayment ratio floor for second homes to 40 percent, 30 percentage points lower than the highest level, with an interest rate floor at LPR+30 basis points, or 4.5 percent.

Guangzhou's moves are expected to be followed by Shenzhen, Shanghai and Beijing. Home prices in these cities are the highest across mainland China.

And the city is said to have also scrapped limits on home prices, allowing developers to set prices themselves, according to mainland media Caixin.

Separately, two debtholders of the commercial unit of Dalian Wanda were reported to have received full interest and principal payments.