China’s recent policy measures aimed at stabilizing the property sector will likely generate demand, but not enough to boost growth in the real economy, according to analysts, reports Nikkei Asia. Starting Sept. 25, households will be able to negotiate with lenders to lower their mortgage interest rates to near the benchmark level of 4.2%. On average, borrowers could save 80 basis points, or eight-tenths of a percentage point, according to state-owned newspaper Securities Times.
The move is part of a key shift announced in late August that includes lowering minimum down payment ratios to 20% and 30% for purchases of first and second homes, respectively. Those buying their first homes in a city will be treated as first-time buyers, even if they own property elsewhere.
Previously, the government discouraged speculation by setting down payment levels of around 30% for first-time buyers, and between 40% and 80% for those buying second homes in major cities such as Beijing.