Many cities in China have lowered mortgage rates to below four percent for first-time home buyers.

Incomplete statistics from Zhuge.com, a Chinese property search engine, shows more than 30 cities including Zhengzhou in Henan, Xiamen and Fuzhou in southern Fujian, Zhuhai in Guangdong, Changchun in Jilin, Shenyang in Liaoning and Tianjin have adjusted mortgage rates for new homes.

Mortgage rates in Xiamen and Zhuhai have been lowered to 3.7 percent and that in Zhengzhou and Fuzhou to 3.8 percent already.

“I listed my house online for sale the day before yesterday, and attracted a dozen buyers before signing the contract that same night,” said a man surnamed Hu from Tianjin.

Insiders believe that in the short term, cities that can implement the dynamic adjustment mechanism on mortgage rates for first-time home buyers, which was established on Jan. 6, 2023, are expected to cut their mortgage rates to below four percent.

Chen Jing from China Index Academy told China News Service that ordinary second-,third-and fourth-tier cities are mostly expected to cut their mortgage rates to below four percent, while first- and core second-tier cities have strong resilience in the new housing market with property prices generally stable, which means adjusting basis mortgage rates is more possible.

According to Chen, the decline in mortgage rates will help reduce loan interest expenses, thus lessening house buyer pressure to pay off mortgage loans. Continued relaxation of policies is expected to aid buyers who are in the wait-and-see stage to enter the market and boost activity.

In addition, Chen predicted that housing market recovery would first occur in first-and second- tier cities, but given the weak expectations of the economy and the housing price in most cities, more time would be needed to reboot the real estate market. The Chinese real estate market may stabilize in the second season this year if policies can be fully implemented.