New loans fu­eled by boom in hous­ing

China Daily (USA) - - TOP NEWS - By WANG YANFEI wangyan­fei@chi­

The na­tion’s new yuan loans in Septem­ber were largely sup­ported by an in­crease in mort­gage lend­ing, but the con­tri­bu­tion is ex­pected to de­cline with tight­ened poli­cies in­tro­duced in the prop­erty sec­tor, econ­o­mists said.

Chi­nese banks is­sued 1.22 tril­lion yuan ($181 bil­lion) in new yuan loans in Septem­ber, up from 948.7 bil­lion yuan in Au­gust, ac­cord­ing to data re­leased on Tues­day by the Peo­ple’s Bank of China, the cen­tral bank.

New hous­ing loans is­sued to in­di­vid­u­als stood at 475.9 bil­lion yuan, ac­cord­ing to Ruan Jian­hong, head of the sta­tis­tics and anal­y­sis de­part­ment at PBOC.

In the first three quar­ters, China’s new hous­ing loans to in­di­vid­u­als rose to 3.63 tril­lion yuan, or 35.7 per­cent of new loans, said Ruan.

“The high pro­por­tion of new house hold lend­ing has to do with the boom­ing hous­ing mar­kets, as­set al­lo­ca­tion pref­er­ences of res­i­dents and fi­nan­cial in­sti­tu­tions, said Ruan.

China’s boom­ing hous­ing mar­ket has seen a surge in trad­ing vol­ume, es­pe­cially in first- and sec­ond-tier cities, ac­cord­ing to Ruan.

The re­lease of the data came after Zhou Xiaochuan, the cen­tral bank’s gov­er­nor, said at a G20 meet­ing in Wash­ing­ton this month that China would rein in ex­ces­sive credit growth.

Zhou said the govern­ment has been “pay­ing at­ten­tion” to ris­ing prop­erty prices and will take steps to pro­mote the real es­tate mar­ket’s “healthy de­vel­op­ment”.

Wang Youxin, an econ­o­mist at the In­sti­tute of In­ter­na­tional Finance, a think tank af­fil­i­ated with the Bank of China, said that the cool­ing mea­sures would curb a sharp in­crease in credit growth.

Zhao Yang, chief China econ­o­mist with No­mura Hold­ings, said the tight­ened pol­icy in­tro­duced ear­lier this month to re­strict pur­chases would re­duce the de­mand for mort­gage loans.

Yao Yudong, for­mer head of the Re­search In­sti­tute of Finance and Bank­ing of the cen­tral bank, said fur­ther mon­e­tary eas­ing is not very likely.


Source: Peo­ple’s Bank of China

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