Chinese Banks Max Out Lending Quotas; Will Real Estate Market Notice?

Small and medium banks are all loaned out in China and they're shutting down their mortgage businesses for the rest of Q4.

Smaller banks cut home credit

More small and medium-sized commercial banks are suspending mortgage loans in the fourth quarter, according to an industrial report.

Housing loan suspensions have been reported in 17 out of 32 cities, including Beijing, Guangzhou, Shenzhen and Zhuhai, said the report by rong360.com, an Internet search platform for loan resources, which surveyed more than 500 banks.

A rapid increase in loans in the first half of the year resulted in a lack of loan quotas for the next half, said the report. The overdraft of credit drained the fund for mortgages in the latter half of the year, particularly the fourth quarter.

Here are the numbers from the survey:

Of the 500 surveyed banks 6.37 percent still offer a 15 percent discount in interest rates, with 16.04 percent offering a 10 percent discount and 44.58 percent going with base interest rates. Another 16.27 percent offer interest rates above the base level and 16.75 percent of the surveyed banks said they have completely stopped lending to homebuyers.

The base loan interest rate is 6.55 percent for a loan of more than five years, according to the Peoples' Bank of China.