(Yicai Global) March 2 -- Shanghai's real estate market has started to recover, as a number of banks have speeded up the mortgage application process and cut rates on home loans.

After the People’s Bank of China pared the loan prime rate in January, mortgage rates for new homes in Shanghai dipped to 4.95 percent from 5 percent, while that for lived-in homes fell to 5.65 percent from 5.7 percent, Yicai Global learned.

Meanwhile, branches of big national and joint-stock banks have been expediting loans on second-hand homes in the city in recent weeks, mortgage managers at the lenders told Yicai Global.

Some have even shortened the entire process to less than 10 days. At the start of the year, it was taking about two weeks just to get a mortgage approved, with buyers then waiting another month to a month and a half to get the loan.

“If the materials submitted by the borrower are all compliant, the approval result should come out in about a week,” said one manager at a branch of Postal Savings Bank of China. “Then, the loan will be released just two to three days after the ownership transfer is completed.”

Lending has eased up for two main reasons, according to mortgage managers and real estate agents: a change in regulatory policy and relatively large lending quotas at banks at the start of the year, a seasonal factor.

To stabilize local market expectations, a number of cities have relaxed their mortgage policies, such as reducing the minimum down payment, increasing the quota of housing provident fund loans, and releasing housing subsidies to specific groups.

Editors: Tang Shihua, Futura Costaglione