Profits of China’s commercial banks may fall victim a bit to the government’s real estate market support policies, and the banks are showing reluctance to introduce their own rules related to housing lending in the future.
Meanwhile, warnings on credit risk from bank supervisors show that they do not want to see a speculative bubble in the real estate market triggered by a relaxation of lending policies.
The People’s Bank of China (PBoC), the central bank, issued new regulations which are now in force setting interest rates for individual housing loans at 0.7 times of the benchmark interest rate and adjusting the minimum down payment to 20% from 30%, measures meant to stimulate buying in the real estate market.
However, PBoC only determined the floating range, leaving appropriate pricing to the loaning institutions.
The China Banking Regulatory Commission (CBRC) issued an urgent circular restating that preferential interest and down payment policies can only be applied to first-time home buyers, excluding second-home loans and others.
Source: China Stakes.com