2014-08-12

Chinese Cities Call for Easing of Mortgage Credit, Bankers Laugh

Here's an iFeng article reminding everyone that while the cities can call on the banks to make getting a mortgage faster, cheaper and easier, the banks have their own ideas, like profit.

"Shaoxing reduced the second home down payment is a bit ridiculous, the down payment ratio is a policy of the State Council, can local governments can arbitrarily change it? Bank can press policy implementation? We have not yet received notice of government departments, whether the ultimate mortgage policy changes to inform headquarters prevail. "Jiangsu and Zhejiang provinces, a banking source said.

......"It's actually hard to blame the bank, after all, is the corporate banking, risk is the eternal theme of this year's decline in sales of real estate more obvious, banks are cautious, we must guard against the risk."

Update: On the other hand, there's news that banks in 4 cities in Guangdong have slashed rates: 向下的螺旋:广东四城房贷利率起底
Recently there have been news that Guangdong signs of loosening mortgage rates, ICBC branches in Foshan first mortgage interest rates from 8% previously lowered the benchmark interest rate to 5%, second home interest rates from 15% from baseline adjusted to 10%.

地方政府频喊话放松房贷 银行内部认为政策可笑
August 8, Fujian introduction of real estate bailout policies, require banks to increase their real estate loans. At present, Guangxi, Zhejiang, Sichuan, Fujian and other provinces and Hangzhou , Shaoxing, Baotou and other relevant policies issued, bank statements and relax real estate lending policies. But the propaganda effect of regulatory authorities and the local government is not ideal, the bank for local government deregulation lukewarm.

Although some banks in Beijing discounts, but requirements are not low. In addition, buyers also made a number of additional requirements. In some second and third tier cities, the first suite of mortgage interest rates not only did not offer, but also to go up 10%.

Increased risk in the real estate market, its operating pressures of the situation, the banks give more consideration to risk control, business interests. Mortgage slowdown, some banks stopped lending, individual housing loans of negative growth. We can say that bank credit has created the current Chinese real estate market, but this round of market adjustment, why banks have real estate homes away?

Frequent local government propaganda banks relax

August 8, Fujian introduction of real estate bailout policies, which mentioned that the commercial banks to increase the supply of housing development loans, and to actively seek to develop commercial Bank line of credit, give priority to ordinary commercial housing development projects reasonable capital needs, further enhance the development loan credit approval efficiency.

Sichuan issuing mortgage bank financial subsidies, Shaoxing two suites down payment of not less than 40%. Within the bank, these policies some "strange" or even "ridiculous."

"Shaoxing two suites down payment ratio decreased a bit ridiculous, the down payment ratio policy of the State Council, whether local governments can arbitrarily change? bank can press policy implementation? we have not yet received notice of government departments, whether the ultimate mortgage policy changes to inform headquarters prevail. "Jiangsu and Zhejiang provinces, a banking source said.

Another bank also said credit limit if the central bank to relax and CBRC things, places not usually intervene. As to whether the bank statement with the relevant requirements of the local governments, or to look at the regulatory authorities, the bank will not easily fit.

Currently, the China Banking Regulatory Commission put the attitude of real estate-related credit is not so clear signs of loosening.

Reality is very skinny and no loosening of mortgage

May, the central bank also called bank official called for the first suite of mortgage tilt, but three months have passed, after all walks of life expectations obviously does not appear loose, individual cities do not loose the anti-tight mortgage policies, the real estate market as a whole is still low state.

Reporters learned that, in the Beijing area, although there are some banks may be discounts, but requirements are not low. CITIC Bank [ -0.89% funding research report ] for co- hand housing intermediary capacity to provide 10% interest rates ; HSBC's policy is that if the loan worked for Fortune 500 clients, listed companies or the civil service, public institutions employees, may be HSBC banks identified as high-quality customers, can the minimum 9.4 fold; Agricultural Bank [ -0.40% funding research report ] for the most hit 9.5 fold quality customers. In addition, very difficult to find a discount bank.

Moreover, some banks also increased the requirement.

A housing agency, said the recent bank in providing first mortgage interest rates, in addition to the higher qualification requirements for home buyers, but also buyers made ​​some additional requirements. If the individual bank to deposit a certain amount as a deposit, individual banks require loan up to a certain amount in order to provide concessions, some foreign banks for home buyers purchase housing price, Fangling other conditions required by individual banks even required to buy a certain amount of its financial Products to be able to offer preferential interest rates.

Beijing Homelink Real Estate Brokerage Co. official told reporters that domestic banks from mortgage lenders generally require at least to the final 45 days, and after more than 30 days. Just to get a bank loan Chen said the bank had promised loan within a week, but eventually wait for nearly two months.

Chain of home real estate research department, said Zhang Xu, Shanghai, Hangzhou and other individual cities slight improvement in the loan amount and loan timing, and Dalian , Nanjing , Qingdao and other cities in terms of loan approval is more stringent, the cycle has also been lengthened.

Jiangxi Liu recently bought a second-hand housing, first-time buyers of bank interest rates go up 10 percent of his request. "Interest rates go up 10% for the two suites is not it? First suite also so expensive?" But the city's banks are in this policy, otherwise they can not borrow money.

Financial Search Platform melt 360 reports that the vast majority of second and third tier cities preferential interest rates have disappeared, the first suite and two suites interest rates gradually converge.

The pursuit of high-yield real estate bank financing difficulties

Not only personal hard money loans to real estate companies are also financing difficulties. In the first half of this year, individual housing loans increased 870.4 billion yuan over the beginning, up by 9.2 billion yuan less. A joint-stock bank said that in an internal meeting on the bank, the bank branches leading to remind cautious to enter the real estate field.

"It's actually hard to blame the bank, after all, is the corporate banking, risk is the eternal theme of this year's decline in sales of real estate more obvious, banks are cautious, we must guard against the risk." A joint-stock banks in real estate finance department official said. This joint-stock banks currently "under the Caidie Man", locate real estate development loan principal showings enterprise strength, project, development of concepts and control of the risks of the enterprise itself, are generally small real estate lending caution.

"After the interest rate market, operating pressure." Said a joint-stock banks. Beginning last year, the bank capital constraints under tight liquidity management more difficult cases, the purchase of mortgage loans attractive to commercial banks decreased. Under certain circumstances the total size of credit, banks will often yield assets put into better use of controllable risk assets, but low interest rates for mortgage loans, not the best variety of businesses.

"There do not do not insist. Companies to devote more resources and attention on consumer mortgages, business loans terms." A joint-stock bank source told the Beijing News reporter.

In fact, from the beginning of 2012, some banks have begun a gradual reduction in the mortgage business, he moved to a higher income consumer mortgage lending field of SMEs.

Bank of Communications [ -1.58% funding research report ] Lian Ping, chief economist at the Bank believes there are three reasons for the real estate credit crunch. First, the entire banking industry risk appetite declined. Real estate is in a period of adjustment, commercial banks cautious attitude of the real estate loan interest rates have raised, normal. Second, bank deposits nervous, debt costs, because of cost considerations, prudent lending. According to 75% of the loan-deposit ratio to count, put 75 yuan loan to pull deposits of $ 100. General deposits declined, the Internet has brought financial loss of deposits, the bank takes a higher cost to attract funding. Third, this year related to off-balance sheet banking business made ​​a lot of specifications, such as the proportion of the Trust's growth over last year dropped a lot, but these are also an important channel for financing housing prices.

Bank acceleration "to the real estate of"?

From real estate development loans to individual housing mortgage loans, from ordinary residential to commercial real estate, real estate loans this year, the situation has been rendered fully tightened. Academy of Social Sciences researcher Strategic Finance, Economics, Dr. Kwong Chun high analysis, from the strict control of real estate development loans to tighten personal housing mortgage loans, indicating that the bank "to the real estate of" The pace is accelerating.

Wind data show that in 2013 16 listed banks, Minsheng, Shanghai Pudong, China Merchants Bank, Ping, Ningbo five bank housing loans to individuals for negative growth.

Which Ping An Bank [ -1.03% funding research report ] individual housing loans cut 50 percent. January 2013, Ping An Bank had to adjust mortgage policy: credit resources to small and micro business, unsecured loans, auto financing business and other strategic business tilt. For higher demand for traditional mortgage market regulation of such businesses were conscious compression.

Minsheng Bank [ -0.77% funding research report ] the balance of individual housing loans was reduced from four consecutive years since 2010. Back in 2009 the bank suspended the second-hand housing on housing loans.

However, the Bank of China [ -0.37% funding research report ] Industry Association released the "China Banking Development Report (2014)" shows that in 2013 commercial bank real estate loans still continued rapid growth trend in 2012, in large commercial bank loans mainly changes in the industry table, real estate loans still accounted for 9.51%, and in 2012 almost unchanged.

Lian Ping, explains, the total amount of bank loans to develop significantly increased, but the structure is very different, the increase is mainly shantytowns and affordable housing. After the housing project removed, other development loans significantly reduced, which is why many developers feel very strict loan.

Banks really want to give up the real estate loan?


Finance Credit Expert search platform Xu Jin Rong 360 believes that such a situation does not occur, first bank to stop doing mortgage business is the root cause of the mortgage business because of low income, but in any case, a personal mortgage business is still the highlight of the retail banking , bank personal loans that can not be completely discarded low-risk and high-quality assets only chase high-risk, high-yield SME loans and other services. Second, the banks stopped lending management style is reflected differentiation, but most banks will not give personal mortgage business, especially state-owned big firms.

Lian Ping believes that the next 5-10 years, the banking financial support for the real estate industry will only increase. Because the long-term risk, the commercial banks have an incentive to increase support for the real estate, the Chinese economy is moving from high-speed to high-speed, medium speed to slower growth, risks banks face pressure to increase, so will choose a better risk control business , and long-term risks of real estate is small, but there is collateral; income areas, commercial banks, put the loan proceeds to the real estate pricing is clearly above average

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