The central bank's rare big interest rate cut will help stabilize the property market but will not ease property developers' tightened cash flow, experts said.
The People's Bank of China cut the benchmark interest rate by 1.08 percentage points on Wednesday, the biggest slash in 11 years, lowering the one-year lending rate from 6.66 to 5.58%.
'The rate cut, which can help cut the cost of property developers' financing and property buyers' individual mortgage, is definitely good news to the real estate industry,' said Qin Xiaomei, research chief at CB Richard Ellis' Beijing branch.
The cut means a homebuyer could save as much as 900 yuan each month on a 10-year, one-million yuan mortgage.
'But the rate cut will hardly revitalizes the sluggish nature of the market,' said Qin.