Amid a growing property crisis, the People's Bank of China (PBOC) announced that 5-year loan prime rates will be slashed by 15 basis-points to 4.2% while 1-year loan prime rates, which is often used for corporate loans, will be decreased from 3.7% to a record low of 3.65%. Some analysts and stock traders believe that another 10 basis-point cut to the prime rates could be seen in the coming months as the national bank attempts to combat the escalating property crisis.

Official Chinese documents and reports from groups like the China Real Estate Information Corp state that home sales in the nation have fallen for 11 months in a row, which is the longest slump since China opened a private property market in the late 1990s. Several prominent Chinese developers have stopped working on homes that were already sold over financial concerns, resulting in many homebuyers threatening to halt mortgage repayments until work resumes. Some analysts state that alongside building projects grinding to a halt, Covid-zero-related lockdowns, the current property crisis has wiped the equivalent of over a trillion United States dollars off the value of the real estate sector in the last year. 

Real estate currently accounts for over 2/3 of Chinese personal wealth. As roughly 70-80% of new home sales in China are recorded as "pre-sales" (homebuyers often would pay upfront for projects under construction so that developers could fund several projects at once), many homebuyers begin paying mortgages before even moving into their home. However, with several developers halting construction or even defaulting on loans, some people who pre-purchased a home are worried that they may never actually be handed the keys to their homes. 

In the latest quarterly economic meeting in July, the Chinese Communist Part's Politburo did not mention the nation meeting its annual economic growth target of 5.5%, while Goldman Sachs lowered China's 2022 GDP forecast from the previous 3.3% to 3%. 

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