China’s property market unlikely to rebound immediately despite policy easing, report says

By Hu Xiaocen | October 8, 2014, Wednesday |

Online Edition

CHINA’S oversupplied property market is unlikely to immediately rebound despite the central bank’s recent mortgage relaxation, Standard & Poor’s Ratings Services said in a report today.

The People’s Bank of China revised the definition of first-time home buyers to include people who want to buy a second property have no outstanding mortgages by the end of last month.

First-home buyers have to make down-payments of 30 percent, with a maximum 30 percent discount to the benchmark rate, while second-home buyers have to make down-payments of at least 70 percent.

"We believe the property downturn will continue as buyers stay on the sidelines in anticipation of further price declines," said Standard & Poor's credit analyst Bei Fu.

"But longer term, the central bank's latest move is a big step forward. It will allow more buyers to qualify for preferential mortgage rules and should help to release pent-up demand. The move is also in line with our view that the Chinese government has an incentive to foster a healthy property sector," he said.

Fitch Ratings said in an earlier report that the central bank’s move will help stimulate demand from home upgraders in the current slowdown. However it will also facilitate speculation, because banks offering the mortgages would have difficulty in differentiating end-users from speculators.

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China’s property market unlikely to rebound immediately despite policy easing, report says

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