The Shenzhen branch of Huaxia Bank raised its housing loans down
payment proportion to 40 percent last week, as a pilot in response
to the China Banking Regulatory Commission (CBRC)'s policy
direction. The change is an omen of government sponsored austerity
in housing loans.
Statistics show that property prices in China's 70 large and
medium cities rose by 7.5 percent year-on-year in July. Shenzhen
and Beijing were listed amid the top five in housing price growth
rate, with year-on-year increases of 16.1 percent and 11.6 percent
respectively.
According to earlier media reports, CBRC chairman Liu Mingkang
said commercial banks are expected to raise the down payment ratio
on housing loans to cool down the sizzling realty market.
Several other local banks are amending their personal housing
loans policies.
A branch of Shenzhen Development Bank in eastern China disclosed
that it has suspended individual housing mortgage loans for
business purposes.
Meanwhile, one branch of China Merchants Bank lifted the down
payment for second-hand house loans to 40 percent. Second-hand
house loans have been ceased in Shenzhen branches of China
Construction Bank and Bank of China.
At China Construction Bank's Beijing branch, if a client plans
to purchase a second-hand house but the house's primary loan hasn't
been paid off yet, the client's loan application will probably be
declined.
According to CBRC, the ratio between loans and deposits reached
74.2 percent last year in Chinese shareholding banks, toeing the
alarming line of 75 percent set forth by corresponding
regulations.
In the first seven months this year, newly added loans amounted
to 2.77 trillion yuan (US$364 billion), nearly 90 percent of last
year's total.
On August 21, China's central bank raised the benchmark interest
rates for the fourth time this year. The personal housing
accumulation fund loan rate was raised 9 basis points to 4.59
percent for five years or less and to 5.04 percent for five years
above, in a further effort to curb the housing loans.
(Chinadaily.com.cn August 23, 2007)
