Reported 6 months ago
S&P Global warns that China's recent measures to boost the property market could increase risks for banks in lower-tier cities. The stimulus, including lower down payment requirements and removal of mortgage rate floors, may drive up property demand but also lead to higher leverage and potential mortgage defaults in tier-three cities. This could result in a 14% decline in property prices in these cities by 2025, causing some homebuyers to fall into negative equity situations and possibly default on mortgages, requiring banks to pursue additional assets to cover losses.
Source: YAHOO