China rate cut seen helping property market

Hong Kong

CHINA'S second interest rate cut in just over three months will boost property sales and help stabilise weak house prices, but a strong recovery in the sector is unlikely given a glut of unsold homes, market watchers said on Monday.

The property industry accounts for some 15 per cent of China's gross domestic product, so signs of a bottoming out in the sector would be good news for the government and central bank after economic growth slowed to a 24-year low last year.

China's central bank cut interest rates on Saturday, in the latest effort to support the world's second-largest economy and ward off deflation. The move followed an earlier decrease in November and reductions in mortgage rates and downpayment levels for some home-b…