Mortgage loans to continue despite some banks running out of credit

Updated 2017-06-12 13:54:42 Ecns.cn

(ECNS) -- Commercial banks will not stop issuing mortgage loans for property purchases on a large scale, Chinese media reported, although some banks have stopped the service after running out of credit this year.

About 20 banks, out of a total of 533, were reported to have suspended mortgage loans, and the number was expected to increase as China continues control over the real estate market.

However, most banks would not follow the move. "We did not stop mortgage loans. Interest rates did not change either," a manager with a commercial bank told the Chutian Metro Daily in Hubei Province. "Some banks have stopped the business because they have run out their line of credit this year," he added.

"The watchdog has urged banks to keep a balance on issuing loans, but some banks ran out their credit ahead of schedule. So, they have had to stop issuing mortgage loans."

According to some industry insiders, it was a general trend to control the increase of banks' mortgage loans, but a large-scale halt on such loans would not happen. Still, it would become more difficult for homebuyers to get loans in the future.

Rocketing housing prices, especially in major cities, had fueled concerns about bubbles. China's policymakers announced in December that "houses are for living in, not for speculation". Since the end of 2016, dozens of local governments have passed or expanded restrictions on house purchases and increased the minimum down payment required for a mortgage. The market boom was also cooled by relatively tightening liquidity conditions as China moved to contain leverage.

Some commercial banks in China's first-tier cities, including Beijing, Shanghai and Shenzhen, hiked interest rates for mortgage loans. According to statistics from Rong360.com, a financial information provider, the average interest rate for a first home mortgage was 4.73 percent in May, up 4.64 percent compared with the previous month.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58October 23 2017 21:26:47

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16October 23 2017 21:26:47

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18October 23 2017 21:26:47

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords