Individual mortgage growth dipped in October in Shanghai after
state moves to curb speculation in the property market, the central
bank said yesterday.
Individual mortgage at banks in Shanghai added 4.98 billion yuan
(US$671 million) in October, 1.15 billion yuan less than the figure
a month ago, the Shanghai headquarters of the People's Bank of
China said yesterday in a statement.
A wait-and-see attitude is prevailing in the property market
after a September 27 rule from the central bank and the China
Banking Regulatory Commission that requires mortgage holders who
apply for another home loan to produce a downpayment of at least 40
percent and pay a 10-percent premium on their interest rate.
For people seeking a third or fourth mortgage, the downpayment
and interest rate should be much higher, with specific figures
determined by commercial banks.
The Shanghai headquarters of the central bank estimated the
newly added mortgages are mainly those approved before the tighter
move.
Two other factors also help drag down mortgage growth.
One is that working days are less in October due to the National
Day holidays. The other reason is that some mortgage owners tried
to pay back their debts to lenders before the new mortgage rates
took effect.
China has raised its lending interest rates five times this
year. For existing mortgage bearers, the extra payments begin at
the start of the new year.
That's why some mortgage owners increase payments before the
year's end.
Yuan savings at overseas banks dropped 460 million yuan in
October in the city.
And yuan savings at all banks in Shanghai decreased 55.3 billion
yuan, a further drop of 60.5 billion yuan than the September
level.
The stock market has continued to drain money from the banking
system as initial public offerings flourish on an already
burgeoning bourse.
New foreign currency lending grew to US$1.17 billion in October,
up from US$1.13 billion a year ago.
(Shanghai Daily November 9, 2007)
