Even as China loosens credit to bolster slowing economic growth, it is continuing to tighten control over the real estate sector, reported Caixin.
Shenzhen branches of two of the “big four” state-owned commercial banks halted mortgage lending to homebuyers in mid-November, Caixin learned. The booming southern city Shenzhen, with a population of more than 13 million, borders Hong Kong and is one of China’s most prominent financial and industrial centers.
Since Nov. 18, China Construction Bank stopped granting any new mortgage loans in Shenzhen, a senior real estate industry participant told Caixin. Bank of China has taken a similar move. In Shenzhen, China Construction Bank is usually considered a bellwether for other banks, a person from the Shenzhen branch of a joint-stock bank told Caixin. He said his bank is also considering suspending mortgage loans.
Banks are caught between the year-end depletion of quotas covering household credit imposed by the central bank and pressure from so-called “window guidance” from the central bank and local banking regulators to curb real estate-related credits. Banks must wait until Jan. 1 to tap into their 2020 mortgage loan quotas.