Date
19 September 2017
The property market has shown signs of cooling since late last year. Photo: Bloomberg
The property market has shown signs of cooling since late last year. Photo: Bloomberg

PBoC tells banks to step up first-home loans

The central bank has told commercial lenders to speed up mortgage approvals, especially for first-home buyers, and set loan rates at reasonable levels, National Business Daily reported Wednesday, citing the central bank.

The People’s Bank of China issued the call at a gathering of major commercial bank chiefs Monday amid signs of continued weakening in the property market.

Golden Fortune chief economist Fu Lichun was quoted as saying that existing tight limits on mortgages to first-home buyers may lead to a hard landing for the property market.

Fu said the central bank’s action reflects its clear desire to encourage lending to first-home purchasers and stop loans to buyers with more than one home.

Mainland home prices rose at double-digit rates in most cities last year, but the market has shown signs of cooling since late 2013 as governments have clamped down on property speculation and banks have made it harder for homebuyers and small developers to get loans.

An official with a city commercial bank told the newspaper that with higher money costs, banks prefer to lend to sectors other than property because mortgage profits are thin.

Data released by the National Bureau of Statistics on Tuesday showed that property investment slowed in April.

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