China Lowers Mortgage Rate to 4.4% Amid Fears of Housing Market Collapse

[Asia Economy Reporter Kim Hyunjung] The People's Bank of China has decided to lower mortgage rates for new home loans to stimulate the sluggish housing market and boost the economy.

According to Bloomberg on the 15th (local time), the People's Bank of China lowered the mortgage rate floor for first-time homebuyers from the previous 4.6% to 4.4%, a 0.2 percentage point reduction. The central bank explained that this measure aims to drive housing demand and promote the stable and healthy development of the real estate market.

China's housing market, which is also an important source of domestic economic activity, has seen a rapid decline in sales since August last year. Although the government has eased previously tightened regulations to stimulate the market, the situation has worsened due to overlapping factors such as city lockdowns caused by COVID-19. Earlier this month, housing sales in 23 major Chinese cities fell to about one-third compared to the previous year. Prior to this rate cut decision, new mortgage loans in China for April were reported on the 13th to have decreased by 60.5 billion yuan (approximately 11.3752 trillion KRW) compared to the previous year.

Maggie Wei, a Goldman Sachs analyst, said, "This rate cut is a big and clear signal that policymakers are pushing for a relaxation of China's real estate policies," adding, "It is a step in the right direction, but more support will be needed to stabilize the market."

This content was produced with the assistance of AI translation services.