Residential and commercial buildings are located in downtown Guangzhou, China October 7, 2017. REUTERS/Bobby Yip

BEIJING, Feb 21 (Reuters) – China’s four biggest banks cut mortgage rates in the city of Guangzhou by 20 basis points on Monday, two people familiar with the matter said. .

The southern city of Guangzhou, capital of Guangdong province, is home to the country’s most indebted property developer, China Evergrande Group (3333.HK).

The move follows decisions by some banks to require lower down payments in some cities last week. Media also reported this month that developers will also have easier access to pre-sale products from residential projects. Read more

Guangzhou branches of the Bank of China, Industrial and Commercial Bank of China (601398.SS), China Construction Bank (601939.SS) and Agricultural Bank of China (601288.SS), the two people said.

For those buying their second homes, the rate was also lowered by 20 basis points to 100 basis points from the LPR, the people said, declining to be identified due to the sensitivity of the matter.

The four banks did not immediately respond to requests for comment from Reuters.

The one-year LPR, a market-based benchmark lending rate, was 3.7%, while the five-year rate was 4.6%.

Regulatory restrictions on borrowing plunged China’s real estate sector into a liquidity crunch last year. The contagion engulfed a slew of developers and contributed to a sharp fall in China’s property market, which accounts for a quarter of its economy.

Several banks in the eastern city of Suzhou in Jiangsu Province also lowered the mortgage rate for first-time home buyers to 4.8%, Chinese media Cailianshe reported on Monday.

Reporting by Beijing Newsroom, editing by Edwina Gibbs

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