Property Loan Risk Greater Than Anytime Since 2008 Crisis

Reuters: Property loans, the glass chin of China banks
China's top banks are lending more to homebuyers and developers than at any time since at least the global financial crisis, making them vulnerable to a property market downturn as prices overheat and real-estate firms struggle with a growing debt burden.

China's top five banks had mortgages and loans to the sector of 12.4 trillion yuan ($1.9 trillion) at end-2015, up 11 percent over the year, and representing 28 percent of total loans, a Reuters analysis of their balance sheets shows.

That is the biggest exposure on their books, more than to manufacturing or transportation, and it exceeds 40 percent, up from about 26 percent seven years ago, if all loans secured on property are included.
China relied on real estate post-2011 to drive growth as the economy slowed and this led to problems in 2014-2015. Mortgage financing has soared, with Shenzhen's total mortgages already up 50 percent in 2015 and Beijing on pace to double last year's totals as of April. There's already a sentiment shift in the market, with prices stabilizing and some expecting a drop by summer.

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