The Chinese Communist Party authorities have recently stepped up regulation of the property market, with banks in some cities suspending loans for second homes and some raising loan interest rates as a way to suppress the property market. The banks’ related measures have drawn public discontent.
The Securities Daily reported on April 16 that, according to the monitoring data of mortgage interest rates of 674 bank branches in 41 key cities by Rong360 Big Data Research Institute, from February 20, 2021 to March 18, 2021, the national average interest rate for first-suite loans was 5.28%, up 2BP (basis points); the average interest rate for second-suite loans was 5.57%, up 1BP. The overall level of mortgage rates in key cities nationwide generally rose.
An account manager of a large state-owned bank revealed, “Our bank has been notified that the mortgage loan interest rate will be increased from May 1.”
Guangdong Huizhou, Meizhou and other cities banks mortgage rates have also increased to varying degrees. A state-owned bank’s personal loan manager said that the bank’s mortgage rates have recently increased, and the current first and second suite rates are above 6% after the increase.
In the mortgage rates rise at the same time, mortgage quota is also very tight, some banks have no available quota, had to suspend the new second-hand mortgage business acceptance, recovery time is unknown.
The staff of a branch of a joint-stock bank in Wuxi said, “No more loans for second-hand houses are accepted because there is no quota, and the previously approved home buyers are waiting in line for the release of funds, and the waiting time will be lengthened.”
A branch of a large state-owned bank in Huizhou, Guangdong Province, personal loan specialist said, “affected by the policy, the quota control is very strict, at present, the main appointment system, the appointment before the acceptance, and the release of funds for a longer period of time, after the mortgage registration is completed at least three months to six months.”
The banks’ tightening control of mortgage loans is a sign that the Communist authorities are escalating their policies on property market regulation and control. For the recent phenomenon that some banks in some cities have increased mortgage rates and suspended the acceptance of mortgage business. Zhang Dawei, chief analyst of Centaline Property, said that the core of real estate regulation and control is the banks.
But even under the strengthening of control by the Chinese Communist Party authorities, the amount of residential mortgage loans continue to rise. The central bank of the Communist Party of China recently released credit data for March and the first quarter show that medium- and long-term loans to residential households during the same period is still a record-breaking. March new credit data show that the new medium- and long-term loans to residents, mainly personal housing mortgage loans, 623.9 billion yuan, an increase of 212.6 billion yuan from a year earlier, and still an increase of 150.1 billion yuan from a year earlier against the background of a rising base.
For the future of mortgage issuance will not be relaxed, some bank insiders believe: “may take the means of review become stricter, lending cycle longer, close monitoring of the post-loan situation, etc.. Under regulatory pressure, the mortgage quota is very limited, and the pace of future placement will slow down.”
The suspension of second-hand mortgage loans and the increase in interest rates have sparked discontent among the public.
Guangzhou netizen “huh his father” said: “huh ~ not to solve the fundamental problem, just take the need to open the knife, second-hand houses do not allow loans, more people can not afford to buy a house, let alone talk about marriage and children, the birth rate is not negative to strange!”
Shanghai’s “brilliant212_435” said: the bank “to the financial concessions, it seems to suck back from the mortgage.” Haikou “kwaan2688” said bluntly: the bank is “taking the opportunity to make huge profits.”
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