China's recent lift of the mortgage loan interest rate has aroused concerns
among consumers that it will now be more difficult to buy a house. But the
deputy central bank chief Wu Xiaoling clarified that the change has been made to
check rampant speculative activities in the real estate market, and will, in a
long run, benefit ordinary consumers. Our reporter Ning Yan has more.
Deputy Governor of the central bank, the People's Bank of China, Wu
Xiaoling says the new mortgage loan policies are aimed at gearing down rocketing
real estate prices by cooling down speculative activities in the real estate
market.
"Through these measures, the central bank intends to readjust the real estate
market from the perspective of demand. The target group is not common house
buyers, but those involved in excessive speculative activities that have driven
up housing prices," said Wu.
Buying a house and renting the property has become a popular way for buyers
to payoff their mortgages. But experts have repeatedly warned that
investment-oriented house buying may lead to overheating and investment bubbles
in the real estate sector.
The price boom is also occurring because overseas investors have been buying
up apartments in hopes of profiting from rising prices.
Experts believe that higher interest rates for real estate mortgages can work
to decelerate the rising real estate prices. And the markup is estimated to drop
from last year's level of 14 percent to 5 percent.
And Wu Xiaoling notes that stable real estate prices will eventually benefit
ordinary consumers.
"The fluctuations of housing prices cannot be adjusted merely by financial
leverages. They also involve land, fiscal and taxation policies. It needs a wide
range of factors in the national economy to help control housing prices on a
rational and balanced level," said Wu.
According to the People's Bank of China, the minimum regulated interest rate
for housing loans of 5 years or more rose to 5.51 percent, a 0.2 percent
increase.
Individuals will be required to make a 30 percent down payment, instead of
the original 20 percent.
