New home sales in Shanghai rebounded last week from a five-week low as supply increased, but analysts said the recovery may be slow after some commercial banks raised mortgage rates for buyers of first homes.
Sales of new homes, excluding affordable housing, climbed 39 percent from a week earlier to 118,700 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said yesterday.
The supply of new homes doubled last week to 178,200 square meters from the week before, the company said in a report.
But analysts are worried that the tighter lending by banks for first homes could hit the recovery of sales in October, a peak season of a year.
Banks, including China Construction Bank, China Everbright Bank and China Guangfa Bank, have increased interest rates on mortgages for first homes in big cities, including Shanghai, to curb risks.
China Construction Bank yesterday confirmed it had raised mortgage rates in Beijing by 20 percent to 1.05 times the central bank's benchmark lending rate, and China Everbright Bank said it had hiked the rates by a similar margin in Shanghai.
Other large state-owned lenders, such as the Industrial and Commercial Bank of China, the Bank of China and the Bank of Communications, said they have not raised rates. The Agricultural Bank of China declined to comment.
"Tight liquidity and increasing cost on borrowing have forced some banks to control the mortgage rates for first homes, which have been relatively low," GF Securities said in a report.
Lu Qilin, a researcher at Deovolente, said: "Sales of low and medium-priced homes will most likely be affected by the recent tightening measures on lending to first-home buyers. Such tightening will halt recent recovery in home sales."
A report released yesterday by the Shanghai Statistic Bureau showed sales of new homes, excluding affordable housing, fell 14.9 percent year on year in the first nine months to 10.6 million square meters.
