Mortgage loan rates in many parts of China have dropped while China's biggest bad-debt managers are moving to support cash-strapped real estate developers at the urging of policymakers in Beijing, adding to official efforts to contain the fallout from a string of defaults.
Banking institutions in Huizhou of Guangdong province have generally lowered mortgage rates since January 21, after the central bank reduced the interest rates.
Local media reported that the mortgage loan rate for the first home declined to as low as 5.2 percent and the rate for the second flat was reduced to as low as 5.35 percent.
Compared to December last year, the mortgage rate for a first home in Huizhou has decreased by roughly 80 basis points to 150 basis points, and the mortgage rate for a second home has fallen by 85 basis points to 215 basis points.
Shenzhen shows a similar trend.
Many banks including the Bank of China have lowered the mortgage rate for the first home to 4.9 percent from 5.1 percent at the end of last year, and the mortgage rate for the second home falls to 5.2 percent from 5.6 percent, reported Securities Times, a national financial newspaper in mainland China
Meanwhile, China's regulators have urged the state-owned firms including China Huarong Asset Management and China Cinda Asset Management, the country's biggest bad-debt managers, to participate in the restructuring of weak developers, acquire stalled property projects and buy soured loans, according to people familiar with the matter.
The urging of policy makers in Beijing to support cash-strapped real estate developers added official efforts to contain the fallout from a string of defaults
Huarong is among financial institutions in talks with embattled developer Shimao (0813), the people said.
Meanwhile, another China's developer, China Overseas (0688), saw its contracted sales fall to 14.8 billion yuan (HK$18.14 billion) in January 2022, with a year-on-year decrease of 45.3 percent, while the relevant gross floor area sold slid 41.6 percent year-on-year to 827,800 square meters.
And Sunac China (1918) said it sold 27.9 billion yuan worth of homes in January, down by 20.6 percent from last year.
