Central bank move to boost property sales

The People's Bank of China's decision to cut the reserve requirement ratio and the benchmark interest rates will encourage more homebuyers to buy bigger, newer homes and help developers reduce inventories in the first-and-second-tier cities, sources said on Wednesday.

"The reduction in the benchmark interest rates and the amount of cash that banks need to hold as reserves will have a significant impact on the property market. The cumulative decrease in interest rates, and subsequently mortgage rates, will reduce financing costs and the down payment requirements. The RRR reduction will make more financing available for home purchasers," said a research note by Savills East China, a unit of global property company Savills Plc.

Most experts, however, are of the view that the central bank moves have made it easier for people to purchase homes, especially the lower income households.