People's Bank of China Gov. Pan Gongsheng on Tuesday announced that Beijing would reduce the interest rates on existing individual mortgages by an average of 0.5 percentage points, and the lower down-payment ratio for second homes purchases to 15% from 25%.
Hong Kong-listed shares of real estate developers like China Resources Land, Longfor Group Holdings and China Overseas Land & Investment were some of the biggest movers, gaining as much as 2.84%, 3.31% and 4.22%, respectively. It's the first time that down payment levels for first and second homes are unified, and the lower rate is expected by the PBOC to reduce household interest payments on mortgages by an average of 150 billion yuan a year .
Chinese policymakers have been ramping up support to reduce household's financial burden and shore up the troubled real estate sector.The central bank will also offer guidance for commercial banks to improve pricing mechanisms for mortgage loans, Pan said at the briefing, where he also announced that that China will cut the amount of cash banks need to have in hand, known