Recently, the real estate market is experiencing a round of “housing loan shortage”. Major banks in many hot cities have raised the interest rates of the first and second housing loans, or suspended the second-hand housing loans.
According to the statistics of the shell Research Institute on the housing loan business of 72 cities in China, the average interest rates of the first and second set of housing loans have risen for seven consecutive months, with a cumulative rise of 17 and 15 basis points respectively in the second quarter. In June, the average interest rates of the first and second housing loans in 72 cities were 5.52% and 5.77% respectively, adding 87 points and 112 points respectively on the basis of LPR, while the minimum interest rates stipulated by the central bank for the first and second housing loans were LPR and LPR plus 60 basis points respectively.
Even if mortgage interest rates continue to rise, but loan applications are not immediately approved. It is reported that in hot cities such as Guangzhou and Hefei, it takes about 4-6 months from the approval to the issuance of housing loans. Some banks have run out of credit in the first half of this year, and the amount of loans being approved in the third quarter may not be enough. Some bank mortgage managers simply told their customers that if they applied now, they would have to make loans in the fourth quarter at the earliest, or even postpone them to 2022.
In fact, the “money shortage” in the real estate market is not unique this year. Whenever the real estate market is tightened, there will be a “housing loan shortage”, such as the end of 2013 and 2017-2018. In early February 2018, Guangzhou Branch of the four major state-owned banks raised the mortgage interest rate collectively. When money shortage reaches a certain level, there will be a “stop lending tide” of second-hand housing. For example, in August 2019, 12 banks in Hefei announced that they would not make second-hand housing loans, including several state-owned banks.
Recently, Shenzhen, Guangzhou, Dongguan, Zhengzhou, Chengdu and other cities have appeared second-hand housing “stop lending tide”. Of course, none of the banking officials claimed to stop the loan, but the front-line business personnel said to “suspend” or told the customer that the loan application may not be approved within a few months, and there is no timetable for approval at present. The author believes that this round of “housing loan shortage” is more turbulent than in the past, and the reason is that the proportion of housing loans of major banks has exceeded the limit.
At the end of 2020, the central bank announced the “five categories of housing loan concentration”. Among the workers and peasants, large state-owned banks, such as the establishment of diplomatic relations, are the first. The upper limit of real estate loans is 40%, and the upper limit of personal housing loans is 32.5%; China Merchants Bank, China CITIC Bank and other joint-stock banks as well as large and medium-sized city commercial banks are the second tier, with the upper limit of real estate loans accounting for 27.5% and individual housing loans accounting for 20%. According to the annual report of 2020, among the 18 large and medium-sized Chinese banks listed on A-share market, the proportion of individual housing loans of six banks exceeds the regulatory red line, and the proportion of real estate loans of three banks exceeds the red line. Other banks are basically near the red line even if they do not step on the line.
In the first half of this year, the property market in various regions generally picked up.
From January to may, the sales area and sales amount of commercial housing in China increased by 36.3% and 52.4% respectively. The increase of sales amount was greater than that of sales area, which means that house prices are rising, resulting in the growth of housing related loans.
From January to may, developers’ funds in place increased by 29.9% year on year, and personal mortgage loans increased by 32%. If the head office legal person is used to assess, many banks have not stepped on the line now, because the proportion of housing loans in the mainland and the central and western regions where the property market is relatively stable is relatively low. If you look at the provincial and municipal branches, many hot cities have stepped on the line, and even some city housing loans account for about 50% of the new loans.
Reprint indicated source：Spark Global Limited information