Big Four banks refute reports on relaxation of home loan restrictions

2014-09-24 11:04 Global Times Web Editor: Qin Dexing

China's Big Four banks Tuesday denied rumors that they will ease restrictions on mortgage loans for home buyers who have repaid previous loans, according to media reports.

People.cn, the website of People's Daily, quoted sources from the four banks - Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, and China Construction Bank - as saying that they have no idea about a loosening of the restrictions.

Media reported Monday that residents will be considered as the first-time home buyers if they have repaid all the mortgage loans they previously took, and can enjoy discounts on interest rates when they purchase new homes.

According to the rules issued by the People's Bank of China, the central bank, only residents buying their first homes can enjoy discounts on interest rates.

The central bank and the Big Four were not available for comment by press time.

Analysts said the property market will not see an obvious boost even if the rumors are true, due to the current weakness in sales.

"The number of buyers who might meet the rumored new criteria of first-home buyers is very small," Liu Yuan, senior research manager at Centaline China Real Estate, told the Global Times Tuesday.

Total sales area in the first-tier cities including Beijing and Shanghai declined by 12.5 percent in last week from a year earlier, according to property research institute China Index Academy.

Total sales in third-tier cities saw a decline of 23.3 percent year-on-year in the same period, while sales in second-tier cities, including provincial capitals, witnessed a 7.4 percent rise.

To drive up the property market, some local governments have already eased their home purchase limits by allowing more home buyers to enjoy discounts on mortgage rates, according to previous media reports.

Housing authorities of Wuhan, capital of Central China's Hubei Province, announced on Tuesday to remove purchase limit on new and existing homes and open the local property market to non-local residents starting Wednesday.

The housing authority of Qingdao, East China's Shandong Province, announced Tuesday that its residents will be considered as the first-time home buyers if they have repaid all their mortgage loans.

The government of Fuzhou, East China's Fujian Province, also released a similar policy on Monday.