First home interest rates increase for 18th straight month

Chinese cities are further tightening real estate transactions by raising the lending rate or curbing home sales, moves expected to stabilize the domestic property market, according to an analyst.

Shenzhen in South China's Guangdong Province announced on Tuesday that the city will suspend the commercial sale of houses to corporations and other organizations, while residents are banned from selling their homes within three years of purchase.

The sales restriction prevents corporations from squeezing individual home buyers' needs when housing inventory is insufficient, said Yan Yuejin, a research director at E-house China R&D Institute.

Before Shenzhen, other cities including Xi'an, capital of Northwest China's Shaanxi Province, Changsha, capital of Central China's Hunan Province and Hangzhou, capital of East China's Zhejiang Province have implemented similar controls restricting corporations from purchasing houses.

These new policies send a signal that various measures are expected to be released during the second half of the year, if the domestic real estate market is not stable, Yan said.

Currently, some second-tier cities are stepping up efforts to regulate heated property markets by raising lending rates, 21jingji.com reported.

In Zhengzhou, capital of Central China's Henan Province, the mainstream interest rate for first home loans floated 25 percent (previously 20 percent) above the benchmark rate, the report said.

The national average interest rate for first home loans was 5.64 percent in June, rising for the 18th consecutive month since January 2017, data from domestic loan services provider rong360.com showed.