Major banks in Shanghai have begun offering loans to buyers of a third home, again. This comes after the central Chinese government had banned such a practice.
Thing is, the interest rates being charged seem so high that these loans would only make sense for someone looking to flip a property in the short-term, rather than hold the property, and the loan, for a long period of time:
The Shanghai branch of Industrial and Commercial Bank of China, requires a 60 per cent downpayment for customers wishing to obtain a mortgage loan for the purchase of third homes. The interest rate would be 20 per cent higher than the benchmark rate.
The Shanghai branch of Agricultural Bank of China, requires a 51 per cent downpayment while the interest rate charged would be at least 11 per cent higher than the benchmark rate.
The Shanghai branch of China Construction Bank requires a 55 per cent downpayment and an interest rate that is 20 per cent higher than the benchmark interest rate
If these aren’t loans targeted at property speculators, we’re not sure what are. If anyone has further detail on the situation, feel free to send via email or place in the comments.