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LENDING & CREDIT | Cesar Tordesillas, China
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Bank of China, Huaxia Bank offer lowest rates for first-home buyers in China

Chinese banks have begun offering preferential loan rates for first-home buyers.

 

The move came after a statement by the People's Bank of China last week that the country's big four state-backed lenders would issue more loans to qualified property developers in order to boost entry level housing supply.

This signals that Beijing is relaxing its grip on the property sector after a near two-year clampdown.

Bank of China and Huaxia Bank are now offering a 10 percent discount on loans for first home buyers. Agricultural Bank of China Ltd is offering 5 percent, according to the Securities Joiurnal.

However, the paper said that there were still no signs the government was ready to ease other property restrictions, including a requirement for non first-home buyers to pay cash for at least 30 percent of the total value of a new home.

Since April 2010, China has restricted bank lending to the real estate sector and limited citizens' ability to buy multiple homes or homes in other cities, in a bid to curb speculation as prices in key cities doubled between mid-2009 and the end of 2010.

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