Now interest rates of financial institutions stand at historical lows after eight interest rate cut in a row since 1996. The official one-year term loan interest rate is 5.31 percent, while housing loan interest rates are lower by one tranch correspondingly.
Cheap money not only lessened interest payment burden of property developers, thus increasing profits, but also improved households’ power to purchase houses and boosted growth of property demand. Based on the regression analysis, interest rates fall every 1 percentage point, the national housing climate index for the period rises by 0.5 percentage points. 2. China’s real estate financial market is still underdeveloped.