Back in September 2022 the People's Bank of China and China's banking regulator ushered in measures that allow lower mortgage rates for first-home buyers if newly-constructed house prices drop for three consecutive months.
Thursday statement out of China extends the measures, to the effect that:
- Cities that have shown m/m & y/y housing price drops for three consecutive months are eligible to maintain, lower or remove minimum interest rates on loans for first-home purchases, according to a statement (link in Chinese) from the PBOC and the banking regulatory agency Thursday evening.
- base line for assessment of house price drops is December 2022
- intended to “form a long-term mechanism to support a stable and healthy property market”
- once a city’s home prices increase for three consecutive months, local governments should re-adopt the national minimum interest rates on first-home loans
- the current rules for second-home mortgage loans are unchanged
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