After Sunday’s move, the rate for mortgage loans longer than 5 years will be 4.30 percent, and 3.75 percent for those of five years and shorter. China’s central bank raised interest rates by 25 basis points on Saturday, the second time in just over two months, in a bid to contain the country’s stubbornly high inflation.

“This will further increase the cost of home purchases and will, to some extent, curb investment demand in the property market,” the official Xinhua news agency cited Chen Ming, marketing chief of real estate 5i5j, as saying.

Beijing started tightening the property market late last year, but house prices have remained out of reach for most middle-class families in many cities, although house price has slowed recently.

Land cost, a major contributor to high housing prices, have showed signs of rebound in recent weeks, triggering concerns of fresh tightening steps by the central government.

Source : Konaxis

Liao Min, spokesman of CBRC made the remark in response to recent domestic media reports that the CBRC would tighten such rules on worries that soaring bank loans would create a bubble in the country’s property market.

Down payment on second homes is currently set at no less than 40 percent of the price.

Liao said the rules on mortgage for second home are in line with the situation of the property market in China and are conducive to preventing speculative purchases.

He noted that the CBRC would be cautious about credit risks in the property market and ordered lenders to stick to rules and step up scrutiny over approvals.

Source : Konaxis