Central Planning on Steroids: Beijing Hikes Mortgage Rates to 20pc Above Benchmark

If you want to buy a house, better look now reads the headline as Beijing hikes mortgage interest rates. Mortgage interest discounts are gone for first-time home buyers. Mortgages on second homes will now be 20 percent above the basic rate.

It is expected that other cities in China will implement similar city-level interest rate policies that will differentiate between different types of home buyers.

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From the bank and intermediary was informed that the Beijing area new home, existing home mortgage policy once again tightened. Since May 1, some banks implemented the benchmark interest rate on new and existing homes, on second homes the interest rate is 20% above the benchmark interest rate.

...The so-called "directional rate hike" has two meanings:

First, due to the different city property market situation, so the implementation of the "sub-city policy" control means. Beijing, such hot cities, will be ordered to raise interest rates for the property market;

Second, within a city, will also implement different rates for different types of home buyers.

...And this specific for the city, the specific housing crowd to raise interest rates and differentiated interest rates, the future is likely to promote in the country. Because the three or four lines of the city to inventory is still in progress, a comprehensive rate hike suspected of "one size fits all". After the rate hike, to enjoy the different grades of home buyers, the interest expenditure will be a huge gap.
This is the logical consequence of central planning and inflation: price controls.

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