Some domestic banks have stopped offering a 15 percent discount from the benchmark mortgage-lending rate for first-time house buyers, and analysts said Wednesday it would put pressure on real estate developers and force them to lower prices to boost sales.
"Cutting prices to win sales, which happened in April and May amid shrinking sales, may occur again in the upcoming months, as a result of the change in the loan interest rate," Hui Jianqiang, a senior researcher at the E-house China Research and Development Institute based in Shanghai, told the Global Times Wednesday.
A number of domestic banks - including Industrial & Commercial Bank of China, China Construction Bank and Agricultural Bank of China - have stopped offering 15 percent discounts to first-time house buyers, China Securities Journal reported Wednesday.
Some banks lowered the discount from 15 percent to 10 percent, while others offered no discount at all or even charged 5 to 10 percent more than the benchmark mortgage-lending rate, the newspaper said.
Analysts said it is a trend for banks to raise house loan interest rates.
"Raising the rate is more of a market action by banks, who now prefer to invest in business areas with more policy support, rather than the real estate sector," Hui told the Global Times.
News we recommend:
Golden Week boosts travel firms
Inflation rebounds to 2% in August
Vehicle sales increase, but dealers still see profits drop
Energy conservation: A New Investment Opportunity
NDRC raises fuel prices
Experts say 8% growth possible
Grape expectations from Argentina
Secrets of the Chinese travelers
Answering the E-Waste Question