Panic Buying: Home Lending 78pc of Loans in March

Money supply is growing at a slower pace than in 2016, falling to 10.6 percent yoy growth in March. The montly increase in M2 was 1.06 percent, down from 1.52 percent in March 2016.

The 3-month annualized rate of growth is 13.3 percent, down from 16.2 percent in March 2016.
Although fiat money supply growth slowed, credit growth was robust and centered on the housing market. This is likely fear driven buying, fear that Beijing's stricter housing rules will spread across the country.
Reuters: China's shadow banking rebounds in March, household loans surge despite curbs
Loans to households surged to 797.7 billion yuan in March, according to Reuters calculations using PBOC data, accounting for 78 percent of all new loans in the month.

That was much higher than either January or February and even the 50 percent of new loans in 2016.
Caixin: Are ‘Secured Homeowner Loans’ Fueling Real Estate Frenzy?
One of China’s largest lenders plans to continue issuing so-called “secured homeowner loans” to consumers who use their homes as collateral, despite a debate over whether the practice is fueling a property market frenzy.
China CITIC Bank Deputy Governor Fang Heying said the ongoing commitment to these niche loans complements the bank’s push for more consumer and personal business credit activity.

“We will allocate more assets toward issuing personal credit products in 2017,” Fang told a reporter on the sidelines of a China Banking Regulatory Commission (CBRC) meeting Thursday. “We will continue issuing homeowner secured loans, a credit product that has garnered a good reputation and brand popularity.”
Households are propping up credit growth.

Reuters: China March new yuan loans 1.02 trln yuan, less than expected
A surge in household lending in March also added to worries about whether authorities will be able to get the frenzied property market under control, even as cities roll out increasingly stringent curbs on home buying.

The central bank has raised interest rates on money market instruments and special short- and mid-term loans several times in recent months, most recently in mid-March, to contain debt risks and discourage speculation, though it is treading cautiously to avoid hurting economic growth.

Outstanding bank loans grew at the slowest pace since July 2002 in March at 12.4 percent, while M2 money supply growth hit a more than 6-month low, reflecting the moderately tighter policy stance by the People's Bank of China (PBOC).

M2 growth and modest appreciation in the yuan reduced the reserve coverage of M2 to below 13 percent. There is now 53 yuan of M2 for every $1 of forex reserves.

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