Central bank takes measures to adjust property market
27 September 2007
The central bank is likely to order commercial banks to raise mortgage deposits to at least 40% for homebuyers who intend to buy a second apartment, according to some industry insiders, Xinhua reported (in Chinese). The central bank is also expected to increase the interest rate of mortgage loans 10% above the benchmark one-year lending rate this week. The move is an apparent attempt to curb the rise in house prices and speculation in the property market. The current five-year lending rate has reached 7.83% after the central bank raised the interest rate for the fifth time this year on September 13. This means the interest rate for five-year mortgage loans could reach as high as 8.613%.