The growth of housing loans in Shanghai continues in positive territory though its pace has slowed due to the Chinese central bank's efforts to cool down an overheating real estate market.
The outstanding value of real estate industry loans totaled 363.8 billion yuan (US$43.83 billion) at the end of the first quarter this year, a year-on-year rise of 40 percent, said the 's Shanghai Branch Tuesday.
However, the growth rate was 8 percentage points lower than a year earlier.
"As banks have obeyed the central bank's tightening lending requirement for housing loan applicants, it was the reason for the slowdown," the branch said.
China has asked commercial lenders to increase the down payment requirement for those purchasing luxury homes and apartments and be more cautious in extending loans to real estate developers since last year.
China Construction Bank's Shanghai Branch has demanded down payment of 30 percent for houses with values of more than 1 million yuan and 40 percent for houses worth more than 1.5 million yuan. The minimal down payment requirement is 20 percent for apartments that cost less than 1 million yuan.
As the local government called for a stop in the transfer of uncompleted apartments earlier this month, the housing loan business might grow mildly, industry officials said.
"We have halted the mortgage transfer business after the government's decision," said an official of the Bank of China's Shanghai Branch.
Yin Bocheng, professor of the Real Estate Institute at Fudan University, said the tightened government policies are designed to ensure healthy growth in the city's real estate market.
"Last year's sharp price rises won't be sustainable. The market needs mild regulations to guide its development," Yin said.
(eastday.com April 21, 2004)
