Two Chinese banks hiked their interest rates on mortgages for first homes, after the country’s property prices posted their first monthly fall in a year, according to a report in Bloomberg.

China Construction Bank, the nation’s second-biggest lender by market value, increased rates in Beijing to 1.05 times the central bank’s benchmark lending rate. State-owned China Everbright Bank raised its first-home mortgage rate in Shanghai to the same level. The benchmark for loans of more than five years is 7.05 per cent.

Residential property prices fell 0.03 per cent last month, according to real estate website SouFun Holdings, after the government raised the minimum down payment for second-home mortgages and cities imposed restrictions to curb speculation. 

The move could mean a shift in investment appetite for the Chinese. At the moment, Chinese tastes for real estate within as an asset is huge, with property constituting around 41 per cent of the average high net worth Chinese portfolio, according to a recent report by HSBC. 

The Chinese government forced banks to boost lending to small businesses last week and pledged tax cuts after the collapse of some manufacturers in the Zhejiang province of Wenzhou, which could further squeeze funding for homebuyers. Interest rates should not exceed 1.3 times the central bank’s benchmark, the city’s government said this month.