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Housing market takes another blow as banks raise rates
By Cao Qian |
October 20, 2010, Wednesday
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Online Edition
Online Edition
CHINA'S unexpected first raise of interest rates in 34 months, going into effect today, will help cool down the housing market further in the fourth quarter and the wait-and-see sentiment is expected to prevail among buyers.
The rate hike, however, won't have significant impact on mortgage payers mainly due to the comparatively mild 25-basis-points increase, industry analysts said.
"The latest effort by the central bank, coupled with the recent round of tightening policies imposed on the home sales market by both the central and local governments, will likely make more people sit on the sidelines," said Song Huiyong, director of research at Shanghai Centaline Property Consultants Ltd, operator of the city's largest real estate brokerage chain. "Consequently, home-buying momentum might ebb away at a somewhat faster pace and there will also be larger room for a price reduction."
The People's Bank of China announced late yesterday that the one-year benchmark deposit rate will rise to 2.5 percent from 2.25 percent while the one-year benchmark lending rate will increase by 25 basis points to 5.56 percent.
The rate hike, however, won't have significant impact on mortgage payers mainly due to the comparatively mild 25-basis-points increase, industry analysts said.
"The latest effort by the central bank, coupled with the recent round of tightening policies imposed on the home sales market by both the central and local governments, will likely make more people sit on the sidelines," said Song Huiyong, director of research at Shanghai Centaline Property Consultants Ltd, operator of the city's largest real estate brokerage chain. "Consequently, home-buying momentum might ebb away at a somewhat faster pace and there will also be larger room for a price reduction."
The People's Bank of China announced late yesterday that the one-year benchmark deposit rate will rise to 2.5 percent from 2.25 percent while the one-year benchmark lending rate will increase by 25 basis points to 5.56 percent.
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