Ping An Insurance (2318.HKG, 601318.SHA), one of China’s largest financial firms, has begun offering loans to cover down payments on residential properties, The Wall Street Journal reported. The new service will offer down-payment loan rates as low as 0%, using collateral such as parents’ homes as insurance. With housing sales falling 10.9% in the first eight months of the year this program could assist the housing market, but some economists warn that it could add to debt that is already plaguing China’s housing and financial sectors. Governmental concerns have emerged as well, with the southern Chinese cities of Shenzhen and Guangzhou having issued notices warning that such practices violate the central bank’s requirements on down payments.
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