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Mortgage rate cuts spread to China's wealthier regions

Analysts predicting a long and bumpy recovery in real estate sector

Residential buildings under construction in Shanghai. China’s property market slump began in mid-2021 after efforts to curb borrowing deprived builders of funding.   © Reuters

A number of provincial capitals and other major Chinese cities have temporarily cut mortgage rates for first-time homebuyers as part of broader efforts to revive a real estate market that has been weighing on the world's second-largest economy.

The rate cuts, which continued after the seven-day Lunar New Year holiday, are a sign that wealthier parts of the country are taking advantage of the policies as the latest round of cuts mostly took place in second-tier cities, unlike in the past when they were concentrated in smaller third- and fourth-tier cities.

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