China’s central bank worries about the downturn in the property market. A few days ago, it decided to cut mortgage rates. But real estate companies are still facing a lot of challenges.

Data from Sino-Singapore Jingwei site reveals the current state of China’s real estate industry.

The data shows that more than half of the real estate companies suffered a halving in sales during the first four months of this year. Some of them saw revenues fall nearly 70%, and very few companies could avert a decline rate of less than 30%.

Faced with this situation, the People’s Bank of China on May 15 cut the interest rate for new mortgages to help revive the gloom housing market and boost the ailing economy.

As South China Morning Post reported, China let banks cut the lower limits of interest rates for first-time homebuyers by 20 basis points. The buyers now can borrow money at an interest rate of 4.4% instead of 4.6% as before.

The central bank said that the mortgage rate cut is aimed at supporting housing demand and promoting “the stable and healthy development of the property market.”

China’s property industry has been in a debt crisis after the Chinese regime cracked down on the sector last year, causing multiple defaults. Many China’s real estate developers have missed debt payments, including top giant Evergrande Group.

According to Apollo News, even before the central bank announced the rate cut, many local governments have begun to relax restrictions on their real estate markets. They include Foshan, Zhongshan, Zhengzhou, Chenzhou, Guangzhou, Harbin, Dongguan and Changsha and more than 100 other cities.

In addition, housing companies have also introduced many incentive policies, such as reducing the down payment ratio, offering cashback for payment installment.

However, the results were minimal. None of those measures have played a significant role in boosting the market.

CEO for southern China at Centaline Property Agency, Andy Lee, told SCMP in his words “Home buying has been deterred by economic uncertainties. People would prefer to save money for a rainy day, in case they are sacked. Even banks cutting interest rates and developers offering bigger discounts may not stimulate buying desire”

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