What’s new: Banks continued to lower mortgage rates in February and fewer Chinese cities reported a drop in housing prices in January, in signs that an easing of policy curbs aimed at propping up the market is having an effect.
Mainstream mortgage rates for new and pre-owned housing in 103 surveyed cities each dropped by 9 basis points from last month to 5.47% and 5.75% in February, respectively, according to data compiled by the Beike Research Institute, a property think tank. Banks have also accelerated mortgage approvals, the institute said Monday.
Also on Monday, data from the National Bureau of Statistics showed that only 39 of 70 surveyed cities reported a month-on-month drop of new housing prices in January, compared with 50 and 59 for the previous two months, respectively.
The context: China’ real estate market downturn continued earlier this year amid weak market confidence and financing difficulties for developers. Some property firms have prepared for a tough year ahead, with plans to shrink balance sheets and cut unnecessary positions and spending.
Regulators have continued to relax property curbs to prevent deeper turmoil. Some cities began to lower the size of the down payments required to buy homes this month. The Beike Institute said it expects looser credit conditions for the market, which may help revive sales.
Related: In Depth: Will Subsidized Housing Stabilize the Real Estate Industry?
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
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