Real Estate Financing "Like 1997," Mortgage Lending Could Fall 1 Trillion Yuan

Real estate developers are ground zero for the government's "deleveraging" efforts (for the moment it is mostly a shift from off to on balance sheet lending) because they benefited from shadow banking and trust financing.
iFeng: 2018年房贷或减万亿 房企面临资金严冬
Since 2018, as regulators strictly controlling credit and trust funds from banks into the real estate market, housing prices and financing more and more difficult, and even banks have suspended the real estate industry acceptance of additional credit, or suspend real estate development loan business.

"In past years the previous regulation, even if banks have tightened, but other sources are smooth, housing prices may still find a lot of money to stay afloat in the community, but this time the regulators continue to file out, a lot of broken posterior housing prices, housing enterprises are forced to go abroad for financing. "Shanghai, a broker told the China Times reporter, "this time deleveraging efforts are like traveling back to 1997."

...Trust loans will become an area of ​​focus in 2018

Chongqing, a trust company told reporters that the current housing prices before the top fifty average cost of financing through trust in the 9% -10%, about 50-100 strong at 12%. "Trust is now an average of one month to raise less than 300 million, will go passed nearly 20 billion project, there will be 20 billion waiting to cross, mainly money market." According to the reporter, there are large housing prices make internal requirements, to maximize their smooth cash flow, financial record sales in many cities require the full amount to buy a house, to return the funds as soon as possible. But most of the housing enterprises can not do counter-cyclical to take, even if the regulation has been going on for over a year, but housing prices get enthusiastic.

Centaline Property Research Center statistics show that the year 2017, the 50 most active land buyers bought 2.3927 trillion yuan of land, up 75% from 2016.

...The above-mentioned Trust said that housing prices in the capital chain is very tight, although good sales last year, but also get to many huge development costs would have been real estate business is highly leveraged, once the bank size is limited, audit bonds is limited, it the main funding sources will be a problem.

"Two years ago, mostly in real estate debt issuance costs around 6%, from the second half of last year, simply unable to pay, only abs, and this point will have good cash flows of the asset finance." A large brokerage sources said.
Banks are also reporting slower mortgage lending. Both a cyclical shift in the market and government crackdowns on disguised property lending are playing a role.
2018 Mortgage Lending Could Fall 1 trillion Yuan

In addition to other sources of funding, capital chain housing prices affect the most important thing Days sales outstanding, but the bank also continued to tighten on the loan.

Everbright Bank, a credit manager, told reporters this year compared with last year's amount of the mortgage is quite different. "I do not know the specific figures, but we had a good start to the year, 90% was non-mortgage loans, such as business loans, consumer loans, commercial property mortgages, car loans and other personal loans."

This year, the central repeatedly and strictly control the release of funds from the real estate industry of the incoming signal. January 13, China Banking Regulatory Commission issued "on the further deepening of banking regulation market chaos", the focus of regulation include the issue of non-compliance down payment of individual housing loans; to act as sources of financing or lending channel, etc., directly or indirectly, for all types institutions issuing loans down payment and other acts to facilitate; comprehensive consumer loans, personal business loans, credit cards, overdrafts and other funds for the purchase and so on.

January 25 - - 26, 2018, the national banking supervision and management work conference held in the Chinese Banking Regulatory Commission also raised this year will continue the prevention and control financial risk, will reduce corporate debt ratio, and strictly control high debt corporate finance at the same time, control excessive growth of leverage residents continue to curb real estate bubble.
Bank of Communications thinks mortgage lending could drop between 800 and 1,000 billion yuan, with the effects likely felt later in the year as end of 2017 approved mortgages haven't dispersed funds yet.
Lian Ping, chief economist at Bank of Communications, said that the current growth rate of real estate sales and personal home purchase loans have dropped from a high point. With reference to past experience, it is expected that both will reach the bottom by 2018. Simply assume that the bottom of this round of real estate cycle value and the previous round is about estimated 2018 new personal housing loans of about 3.3 trillion yuan, representing a decrease of 800 billion -10000 billion yuan in 2017. However, since a lot of personal mortgages in 2017 may have been approved but not lent, it is expected that personal mortgages will still be available on a certain scale in the first quarter of 2018 and will not be immediately reduced.

No comments:

Post a Comment