China’s central bank asked the nation’s biggest lenders to grant mortgages in a more efficient and timely way, as leaders seek to address a cooling in the nation’s property market.
The People’s Bank of China told 15 banks including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. at a meeting on May 12 to “improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers,” the central bank said in a statement posted on its website yesterday.
Growth in the cost of new homes in China eased for a fourth month in April as tighter credit prompted developers from China Vanke Co. to Greentown China Holdings Ltd. to cut prices. Demand has weakened as economic growth slows and as banks refrained from offering loans to home buyers and developers amid rising loan defaults.
Adding to signs of a slowdown in the world’s second-largest economy, China’s home sales fell 18 percent in April, the National Bureau of Statistics said yesterday. The real estate data is “testing the tolerance of the government on the economic slowdown,” said Dai Fang, a Shanghai-based property analyst at Zheshang Securities Co.
The central bank also urged lenders to give priority to the borrowing needs of families buying their first homes and strengthen monitoring to prevent any credit risks, according to yesterday’s statement.
The meeting, attended by officials from the China Banking Regulatory Commission, didn’t cover loans to property developers, a person with knowledge of the matter said earlier yesterday.
China’s broadest measure of new credit fell to 1.55 trillion yuan ($249 billion) in April from 2.07 trillion yuan in March, the PBOC said on May 12. Growth in China’s industrial output, investment and retail sales unexpectedly slowed, according to statistics bureau data yesterday, signaling more risks that China may miss this year’s goal of 7.5 percent economic expansion.
To contact the editors responsible for this story: Chitra Somayaji at firstname.lastname@example.org Darren Boey, Nicholas Wadhams