China’s four biggest banks slashed mortgage rates in the city of Guangzhou by 20 basis points on Monday, two people familiar with the matter said – to support a property sector that is suffering from a severe crisis.
The southern city of Guangzhou, capital of Guangdong province, is home to the country’s most indebted real estate developer, Evergrande.
The move follows decisions by some banks last week. The mortgage rate cut from 100 to 80 basis points involved Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China, the sources said.
Two other major banks, Bank of Communications and Postal Savings Bank of China, also cut mortgage rates in Guangzhou, state broadcaster CCTV reported.
The banks did not immediately respond to Reuters requests for comment.
The one-year market-based benchmark lending rate, LPR, is 3.7%, while the five-year rate is 4.6%.
Regulatory restrictions on borrowing sent China’s real estate sector into a liquidity crisis last year. Several banks in Suzhou City, Jiangsu Province, also lowered mortgage rates for first-time buyers, Chinese media Cailianshe reported on Monday.
Source: CNN Brasil
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