MNI BRIEF: PBOC Eyes Real Estate Relending Tools Enhancement
MNI (BEIJING) - The People's Bank of China will enhance its relending tools as incentives to support the acquisition of existing land and houses to promote the use of idle land and improve cash flow in the real-estate sector, Tao Ling, deputy-governor of the central bank, told reporters on Thursday.
The Bank will allow policy and commercial banks to issue loans to qualified enterprises for the acquisition of existing land, while increasing the proportion of relending funds targeting acquisition of existing houses from the original 60% to 100% in a bid to accelerate efforts to reduce real-estate inventory, she said. (See MNI: PBOC Relending Boost More Effective For Housing- Advisors)
The recent introduction of easing moves, including reserve requirement ratio cuts and interest-rate reductions, together with the relevant real-estate financial measures, will have a sustained impact to stabilise expectations, she added, noting cuts to existing mortgage loans will be completed in bulk by Oct 25. After the reduction, mortgage rates will decrease by an average of 0.5 percentage points, saving about CNY150 billion in interest expenses and benefiting 50 million households and 150 million residents, she said.