Home loans expand slowest
By Zhang Fengming |
July 13, 2010, Tuesday
|
Print Edition
Print Edition
INDIVIDUAL mortgages in Shanghai grew the slowest in a year in June as the central government takes steps to curb housing speculation.
Also, people saved more last month for a rainy day due to the sluggish real estate and stock markets.
Individual housing loans rose 3.08 billion yuan (US$455 million) in June in the city compared with an increase of 12.89 billion yuan a year ago, said the Shanghai headquarters of the People's Bank of China yesterday in a statement.
The PBOC said the continuous impact of the government's tightening housing policy caused individual mortgage loans to drop in the second quarter.
In June, household savings rose 45.83 billion yuan in the city, reversing a drop of 320 million yuan a year ago. The sluggish stock and housing markets may have encouraged customers to save.
Between April and June, banks lent 17.08 billion yuan of individual mortgages in Shanghai, a fall of 10.45 billion yuan from a year ago. The second-quarter figure also fell 16.73 billion yuan compared to the first quarter's when housing prices in Shanghai hit a record high before the central government took steps to curb credit-driven speculation.
The measures included raising the minimum down-payment on second-home mortgages from 40 percent to 50 percent and loans for second homes incur an extra 10 percent interest rate. For those who buy three or more homes, higher requirements on both down-payments and interest rates should be levied. Banks are also told to suspend third home mortgages in cities where housing prices rise too rapidly or climb too high.
As a result transactions dived because potential home buyers took a "wait-and-see" stance as they expected further price correction.
Individual mortgages are the most lucrative retail banking business in China because the default rate on the home loans is relatively low, according to analysts.
Also, people saved more last month for a rainy day due to the sluggish real estate and stock markets.
Individual housing loans rose 3.08 billion yuan (US$455 million) in June in the city compared with an increase of 12.89 billion yuan a year ago, said the Shanghai headquarters of the People's Bank of China yesterday in a statement.
The PBOC said the continuous impact of the government's tightening housing policy caused individual mortgage loans to drop in the second quarter.
In June, household savings rose 45.83 billion yuan in the city, reversing a drop of 320 million yuan a year ago. The sluggish stock and housing markets may have encouraged customers to save.
Between April and June, banks lent 17.08 billion yuan of individual mortgages in Shanghai, a fall of 10.45 billion yuan from a year ago. The second-quarter figure also fell 16.73 billion yuan compared to the first quarter's when housing prices in Shanghai hit a record high before the central government took steps to curb credit-driven speculation.
The measures included raising the minimum down-payment on second-home mortgages from 40 percent to 50 percent and loans for second homes incur an extra 10 percent interest rate. For those who buy three or more homes, higher requirements on both down-payments and interest rates should be levied. Banks are also told to suspend third home mortgages in cities where housing prices rise too rapidly or climb too high.
As a result transactions dived because potential home buyers took a "wait-and-see" stance as they expected further price correction.
Individual mortgages are the most lucrative retail banking business in China because the default rate on the home loans is relatively low, according to analysts.
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