Shenzhen banks to end preferential mortgage rates

BEIJING: Bank of China Ltd and four other major state lenders will end preferential mortgage rates for first-time homebuyers in the southern boomtown of Shenzhen after the Lunar New Year holiday, a local newspaper said.

The reported move, in the wake of similar steps taken by smaller commercial lenders in the city, including China Minsheng Banking Corp Ltd and China Everbright Bank, would mark the government's latest effort to rein in runaway property prices.

Agricultural Bank of China Ltd, Industrial and Commercial Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co Ltd will take similar steps, the ND Daily said, citing sources at the Shenzen branches of the lenders.

Housing prices in major Chinese cities soared by more than a fifth in 2010, according to the China Real Estate Index System, run by Soufun, China's biggest online real estate company.

Beijing has since last year taken a number of measures, including curbing land prices, to cool its red-hot property market, combat asset bubbles and counter inflows of speculative funds.

Late last month, the cities of Shanghai and Chongqing introduced China's first-ever property tax for home buyers, revving up the government's battle to curb record home prices and tame inflation.

China will roll out the tax nationwide when "conditions are ripe", the central government has said. — Reuters

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