BEIJING: China cut mortgage rates and down-payment levels for some home buyers on Tuesday for the first time since the 2008 global financial crisis, making one of its biggest moves this year to boost an economy increasingly threatened by a sagging housing market.

The relaxation of lending rules for home buyers was accompanied by steps to increase financing for cash-strapped developers, which may have problems paying their debts if the property downturn persists, as many economists expect.

Yet some analysts cautioned investors against thinking that the housing market and broader economy were poised to stage a stunning recovery.

A glut of unsold or unoccupied homes and buyers’ expectations of further price declines could temper any rebound.

“We’re probably talking about some stabilisation at a low level, but it’s probably unlikely to drive a rebound in this market,” said Zhu Haibin, an economist at JPMorgan in Hong Kong.

Published in Dawn, October 1st, 2014