On the eve of the Spring Festival, the Beijing Banking and Insurance Regulatory Bureau, the Central Bank’s Operation Management Department and many departments in Beijing successively issued documents to strictly investigate the illegal funds entering the property market. On February 18, Beijing Real Estate Association’s official public welfare platform “Jingfangzi” disclosed some of the key practical details of the verification. Among them, the purchaser and his immediate family members apply for operating loans and the flow of operating loan funds during the full purchase period.
In addition, a reporter from the China Securities Journal recently inquired about a number of bank branches in Beijing. The staff at these branches generally stated that personal mortgages and business loans for small and micro enterprises that comply with relevant regulations are processed normally, and interest rates and lending times have not changed significantly.
Focus on checking two aspects
There are constant news that multiple departments in Beijing have jointly conducted special inspections of illegal funds entering the property market. On February 10, the Beijing Banking and Insurance Regulatory Bureau and the Central Bank’s Operation Management Department jointly issued the “Notice on Strengthening the Management of Personal Operating Loans to Prevent Credit Funds from Flowing into the Real Estate Market in Violation.” The aforementioned actions and policies coincided with the rapid increase in transaction volume in the Beijing property market and the jump in transaction prices in some hot areas. Related special inspections have attracted much attention.
“Jingfangzi” disclosed that before the Spring Festival, the competent authorities conducted a general investigation on the transaction cases in hot areas of the property market since January 25, and on this basis, it has dealt with Xicheng Financial Street, Dewai, Haidian Wanliu, and Zhongguancun. Conduct key checks on transaction cases in hot school districts.
Since operating loan funds entered the property market in violation of regulations, it is usually used to purchase a house in full, and then use the house as collateral to obtain loans. Therefore, the verification is mainly aimed at the behavior of the purchaser and immediate family members who have recently applied for the use of the business loan in the purchase of the full payment.
“Jingfangzi” disclosed a case where experts participated in the verification. Someone registered a new small and micro enterprise last year. A few days after registering the company, he signed a second-hand house in the key school district of Xicheng District on the Internet. In the following months, he applied for data from two banks. Million yuan operating loan. This case was screened by inspectors from a large number of house purchase contracts.
After checking the clues, the next step in the actual operation is to check the flow of operating loan funds in multiple departments.
With the cooperation of the bank, the inspector will investigate whether the operating loan is used in the operation of a normal enterprise after the issuance, or it flows into the accounts of other shell companies through a “fictional” false operating contract. Inspectors will “find the bottom line” of the entire flow of the funds from the operating loan. It is clear where each fund will go every time and where it will eventually go. Until it is found out whether it is used for personal purchases. Ultimately, the entities that violate the regulations, whether they are financial institutions, loan assistance agencies or real estate brokerage agencies, will be severely punished in accordance with the law.
The relevant regulatory authorities clearly stated in the notice that banking institutions will strictly investigate and deal with the illegal flow of personal business loans into the real estate market due to imprudent credit management. The joint working group also includes the economic investigation department of the public security. Therefore, the “loan aid agencies” that find out violations of laws and regulations will also be “severely punished.”
“Jingfangzi” also disclosed that those who purchased a house in full with normal funds and did not apply for operating loans were not within the scope of verification.
Mortgage payment remains normal
According to what the reporter of China Securities Journal has learned, the amount of personal housing loans in Beijing is very sufficient, and the time for issuing commercial loans has been significantly shorter than that of the same period last year. The verification of the entry of illegal funds into the property market has not affected the bank’s issuance of personal mortgages, especially personal commercial loans, and the interest rate and lending time of personal mortgages have not changed.
A store manager of Lianjia Real Estate told a reporter from China Securities News that since November 2020, banks in Beijing have significantly accelerated the speed of issuing pure commercial personal mortgage loans. “Now the loan will be released 1-3 days after the transfer of the house book to the bank for mortgage, and the speed is very fast. It usually took 1-2 weeks before. We have cooperative relationships with more than a dozen banks, and the loan lines of cooperative banks are generally sufficient. The interest rate level is stable, and the mortgage interest rate of the LPR superimposed basis point is applied.”
Regarding the recent housing price trend in Beijing, Zhang Dawei, chief analyst of Centaline Property, believes that Beijing’s current overall property market leverage level is almost at the reciprocal level among key cities. On the whole, the market is expected to remain stable under a series of control policies.
From what the reporter of China Securities Journal has learned, the hot transactions in individual areas of Beijing do not represent the level of Beijing’s overall property market. The actual structural market in Beijing’s current real estate market is very prominent. Even in the three most popular “East and West Seas” administrative regions, the school districts have a distinct differentiation. In some hot spots, such as Haidian Wanliu and Xicheng Desheng, it is difficult to find a house. The high-priced school district houses that were reported by the media in the early stage mainly appeared in these areas. However, affected by the actual implementation of the multi-school zoning policy, the sales of school districts in many non-popular school districts have actually been much flatter than in previous years. And some non-popular, non-school district areas even need to lower the price to sell.
“True” small and micro business loans remain stable
Will this review of illegal funds entering the property market affect the issuing of mortgage loans for small and micro enterprises? A reporter from China Securities News interviewed business personnel at multiple outlets. They all stated that the small and micro enterprise mortgage operating loans at their outlets are currently accepted and issued normally, and the preferential interest rate has not changed much, but they will repeatedly emphasize to customers , The loan applied for shall not enter the stock market and the property market.
A salesperson at a branch of a joint-stock bank in Chaoyang District, Beijing, told a reporter from the China Securities Journal that the mortgaged business loan of the branch company where it is located is still normally accepted. When asked whether the recent verification actions had any impact on the loan issuance, the person said that the recent verification is to check whether the funds have entered the property market, the stock market and other irregularities. problem. Recently, the lowest interest rate implemented by its outlets is 3.85%.
According to media reports, some Beijing outlets have recently raised interest rates on operating mortgage loans. The person in charge of a bank branch said that this is different from the actual situation and may be caused by the exhaustion of some low-interest products. He further explained that, generally speaking, during the “good start” period at the beginning of the year, banks will launch some products with preferential interest rates. Such products have limited quotas and are mainly distributed to high-quality or important customers. “It’s not that banks have raised interest rates, it’s more about quotas. It is unlikely that banks will raise interest rates on such products because of relevant verification.
The aforementioned person in charge pointed out that supporting the financing of small and micro enterprises and reducing the financing cost of the real economy are national policy requirements for financial institutions, especially commercial banks. Therefore, each bank will strictly implement this policy, and the basic-level branches will also strictly implement the relevant policies of the head office and branches. At present, the interest rate of operating inclusive loan products for small and micro enterprises is still low, and this trend will continue for some time.
Reprint indicated source：Spark Global Limited information