(Yicai Global) June 21 -- After China's central bank cut the loan prime rate yesterday, a number of cities have lowered the floor on mortgage rates for buyers.

Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou, and Tianjin trimmed the lower limit on home loans for such buyers by 10 basis points to 4.85 percent, 4.55 percent, 4.55 percent, 4.2 percent, 4 percent, and 3.8 percent, respectively, Yicai Global learned from local banks and realtors.

The reductions come after the People's Bank of China cut the one-year and over five-year LPRs by 10 bps to 3.55 percent and 4.2 percent, respectively, to help stabilize investment, consumption, and economic growth as well as promote the sound and stable development of the real estate market.

The LPR cut will stimulate property sales and spur the steady development of the housing market, said Cheng Qiang, chief macroeconomic analyst at Citic Securities.

It is hard to say to what extent the mortgage rate cuts will work, a researcher at a Chinese property developer told Yicai Global, adding that consumers are worried about further falls in house prices. China may soon bring out policies to stimulate the real estate sector, such as relaxing restrictions on purchases in first-tier cities, but it remains to be seen how effective they will be, the person noted.

Since the beginning of the year, the Chinese real estate market has been sluggish, with transaction volume and prices in Shanghai falling last month.

More than 30 cities have launched new housing market policies in 2023. But most measures, such as revising the quota for housing provident fund loans, shrinking the percentage size of down payments, and extending the age limit of loan applicants, were implemented in second-, third-, and fourth-tier cities.

Editors: Zhang Yushuo, Futura Costaglione