“Asymmetric rate cuts underline the urgency of containing the worsening real estate crisis,” said Tommy Xie, head of Greater China research at Oversea-Chinese Banking Corp Ltd. “Lower mortgage rates could help sales stabilize, especially at a time when household expectations are so weak.”
Chinese banks lowered their benchmark lending rates while authorities stepped up support for the property market with additional loans, an attempt at bolstering waning business and consumer sentiment as the economy struggles.
The one-year loan prime rate was cut to 3.65% from 3.7%, the first reduction since January, and lower than the 10 basis-point drop that economists had expected. The five-year rate, a reference for mortgages, was reduced by 15 basis points to 4.3% after being cut by the same magnitude in May.
