The differentiated home loan policies announced on Sunday by State financial authorities will not only lower homebuyers' monthly repayment amount but send a positive signal that the government is all for the stable and healthy development of the housing market, analysts said on Monday.In a joint statement on Sunday, the People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission said that based on the corresponding tenor of benchmark loan prime rates or LPRs, first-time homebuyers can receive home loan interest rates that are 20 basis points below the lower limit from commercial banks. Interest rates for second-home purchases will remain unchanged.The decision is aimed to support firm and rational demand for housing and promote the stable and healthy development of the real estate market, the statement said.To uphold the principle of "housing is for living in, not speculation" and fully establish a long-term mechanism for the smooth functioning of the real estate sector, cities will adopt measures in accordance with their distinctive local property industry conditions, it explained.Industry experts welcomed the changes. "Differentiated housing loan policies will help boost industry confidence. They are in line with the spirit of the announcements made at the recent meetings of the Political Bureau of the Communist Party of China Central Committee," said Ding Zuyu, CEO of E-House (China) Enterprise Holdings Ltd.At its meetings in December, the Political Bureau stated that support will be provided to the real estate sector to better satisfy the reasonable housing demand of homebuyers. For the first time, the meeting announced the goal of promoting the property sector's healthy development and forming a virtuous industry cycle. On April 29, the Political Bureau reiterated that efforts should be made to improve real estate policies based on local factors and meet homebuyers' firm demand for better housing.In April, the PBOC announced it will keep the one-year loan prime rate unchanged at 3.7 percent and the five-year LPR, on which many lenders base their mortgage rates, also unchanged at 4.6 percent.Since the beginning of this year, property policies have been optimized over 200 times in more than 100 Chinese cities. The trend had become very pronounced in April, data from the China Index Academy showed.Following nationwide adjustments to home loan interest rates, more local governments are expected to come up with new measures to lower the cost of rational homebuying, create better conditions for stimulating market transactions and boost reasonable demand, said Chen Wenjing, deputy director of research at the China Index Academy.Industry experts suggested that to maintain stable economic growth, the property market, which is considered one of the economic mainstays, will likely see more positive measures for its rational development.Investment in China's property development edged down 2.7 percent year-on-year to 3.9 trillion yuan ($574 billion) in the first four months. Investment in residential buildings fell 2.1 percent year-on-year to about 2.95 trillion yuan, data from the National Bureau of Statistics showed.The differentiated home loan policies announced on Sunday by State financial authorities will not only lower homebuyers' monthly repayment amount but send a positive signal that the government is all for the stable and healthy development of the housing market, analysts said on Monday.In a joint statement on Sunday, the People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission said that based on the corresponding tenor of benchmark loan prime rates or LPRs, first-time homebuyers can receive home loan interest rates that are 20 basis points below the lower limit from commercial banks. Interest rates for second-home purchases will remain unchanged.The decision is aimed to support firm and rational demand for housing and promote the stable and healthy development of the real estate market, the statement said.To uphold the principle of "housing is for living in, not speculation" and fully establish a long-term mechanism for the smooth functioning of the real estate sector, cities will adopt measures in accordance with their distinctive local property industry conditions, it explained.Industry experts welcomed the changes. "Differentiated housing loan policies will help boost industry confidence. They are in line with the spirit of the announcements made at the recent meetings of the Political Bureau of the Communist Party of China Central Committee," said Ding Zuyu, CEO of E-House (China) Enterprise Holdings Ltd.At its meetings in December, the Political Bureau stated that support will be provided to the real estate sector to better satisfy the reasonable housing demand of homebuyers. For the first time, the meeting announced the goal of promoting the property sector's healthy development and forming a virtuous industry cycle. On April 29, the Political Bureau reiterated that efforts should be made to improve real estate policies based on local factors and meet homebuyers' firm demand for better housing.In April, the PBOC announced it will keep the one-year loan prime rate unchanged at 3.7 percent and the five-year LPR, on which many lenders base their mortgage rates, also unchanged at 4.6 percent.Since the beginning of this year, property policies have been optimized over 200 times in more than 100 Chinese cities. The trend had become very pronounced in April, data from the China Index Academy showed.Following nationwide adjustments to home loan interest rates, more local governments are expected to come up with new measures to lower the cost of rational homebuying, create better conditions for stimulating market transactions and boost reasonable demand, said Chen Wenjing, deputy director of research at the China Index Academy.Industry experts suggested that to maintain stable economic growth, the property market, which is considered one of the economic mainstays, will likely see more positive measures for its rational development.Investment in China's property development edged down 2.7 percent year-on-year to 3.9 trillion yuan ($574 billion) in the first four months. Investment in residential buildings fell 2.1 percent year-on-year to about 2.95 trillion yuan, data from the National Bureau of Statistics showed.
