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(ECNS) – China's big four banks may ease home mortgage rules in a move to bolster the country's sluggish property market, the Beijing News reported, citing two anonymous bank workers.
According to the report, under the loosened policy, people who have paid off their home mortgages could be considered for first-home status and enjoy lower interest rates.
China's big four state-owned banks are Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China.
Although 40 of 46 local governments have loosened restrictions on home purchasing, such as removing the caps on the number of homes residents can buy, China's housing market continues its downward spiral.
In August, new home prices fell in 68 major cities including Beijing, Shanghai, Guangzhou and Shenzhen, according to the National Bureau of Statistics.
On Monday afternoon, Fuzhou, capital city of Fujian province in southeast China, was the first city in the country to release a new home loan policy, allowing those who have paid off their home mortgages to be considered first-time home buyers and enjoy preferential rates.
"It's not that there's no demand for housing, but many people are discouraged by the high down payments and interest rates of a second home," said a real estate developer in Fujian.
Analyst Ma Guangyuan said that if the new home policy spreads to other cities, it would become the strongest stimulus ever.
Under the policy, home buyers could save about 95,000 yuan ($15,000) on a 20-year home mortgage of 1 million yuan ($160,000).
None of the four banks have officially confirmed the news as of this writing.
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