According to a recent news report which quoted numbers compiled by Guangzhou Daily based on the 12 banks' annual business reports, the lenders had extended 1.66 trillion yuan to property developers and 3.62 trillion yuan to individual residential unit purchasers.
It was reported that the three major state-owned banks - Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), and China Construction Bank (CCB), collectively, accounted for 70% of the total property-related loans given out by the 12 banks.
ICBC's real estate loans came to 1.3 trillion yuan of which 421.8 billion yuan went to developers while the balance 874.24 billion yuan were disbursed to individuals as mortgage loans. BOC and CCB dished out 1.27 trillion yuan and 1.21 trillion yuan respectively.
The report also made a comparison in terms of the proportion of property-related loans to total loans in each of the banks.
Industial Bank Co saw the largest share at 30.64%, while China Merchants Bank came in second with 28.04%. Real estate loans in ICBC, BOC and CCB accounted for over 20% of their respective loan portfolios.
China’s central bank had lowered interest rates five times in 2008 and provided a 30% discount for mortgages, resulting in banks increasing loan disbursements to make up for losses due to lower interests.
Policymakers there are embarking on serious measures to curb a potential real estate bubble. Home prices in China have gone up so much with no sign of easing anytime soon, making property prices less affordable for the general public.
This has led the central government to initiate tighter credit policies and more tax levies to deter speculators from driving property prices higher. According to the National Bureau of Statistics, China’s urban property prices rose 11.7% in March, the biggest annual gain since July 2005.
Lawmakers have indicated that second-home buyers seeking credit must fork out at least a 50% downpayment, up from the previous 40% of the property price.
More recently, real estate developers were ordered not to take pre-payments from buyers for uncompleted residential units without official approval.
Lawmakers are also deliberating on the idea of forbidding insurers to park their money in residential and commercial properties, and undertake property development.
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