The People’s Bank of China (PBoC) announced on February 20 a cut in the five-year loan prime rate (LPR) by 25 basis points from 4.2 percent to 3.95 percent. At the same time, the one-year LPR remains unchanged at 3.45 percent.
Yan Yuejin, research director of Shanghai-based E-House Real Estate Research Institute, stated that the biggest rate cut cycle in China’s history has begun, which will exert a positive impact on the real estate market.
Since the upstream and downstream industry chain of the real estate industry is long, the ongoing stabilization and recovery of the industry has negatively affected consumption and investment in the domestic market. The cut in the five-year LPR will provide solid support to the real estate industry, which will help promote effective demand in the market.