Economic Daily: real estate loan growth

Recently, the amount of personal mortgage loans in many places is “tight”, and some home buyers reflect that they need to wait in line for loans. At the same time, the latest regulatory data shows that the growth rate of China’s real estate loans continues to decline, reaching a new low in eight years. Since 2021, the growth rate of real estate loans has continued to be lower than that of various loans.

What is the reason for the high growth rate of real estate loans? Why will the growth rate of real estate loans decrease? What’s the trend of real estate loans next?

A number of industry insiders told the Economic Daily that since the regulatory authorities have started the “real estate loan concentration management”, the growth rate of real estate loans will not increase at a high speed in the future, but two problems still need to be paid attention to.

On the one hand, we should not “demonize” the real estate loans excessively, nor adopt the “one size fits all” model. We should rationally treat the role of the reasonable growth rate of real estate loans in promoting the national economic growth, so as to meet the rigid and improved needs of house buyers; On the other hand, we should pay close attention to the risks caused by the “too fast” growth of real estate loans, and resolutely curb illegal businesses, such as “operating loans” entering the real estate market in violation of regulations, so as to prevent the resurgence of chaos.

Five continuous declines

After continuous rectification, the problem of excessive capital flow into the real estate market has been initially reversed. At present, China’s real estate financing presents the characteristics of “five continuous declines”.

First, the growth rate of real estate loans continued to decline. According to regulatory data, as of the end of April 2021, the real estate loans of the banking industry had a year-on-year growth of 10.5%, a new low in eight years, and continued to be lower than the growth rate of various loans since 2021.

Second, the concentration of real estate loans continued to decline. The proportion of real estate loans in all kinds of loans decreased by 0.5% year on year, which has been declining for seven consecutive months.

Third, the scale of real estate trust continued to decline. The balance of real estate trust decreased by about 13.6% compared with the same period last year, showing a continuous downward trend since June 2019.

Fourth, the scale of financial products investing in real estate non-standard assets continued to decline. The balance of related financial products decreased by 36% year-on-year, and has continued to decline in the past year.

Fifthly, the scale of funds invested by banks in the field of real estate through specific purpose vehicles continues to decline. The scale of related business decreased by 26% on a year-on-year basis for 15 consecutive months.

Behind the “five continuing decline” is the result of resolutely implementing the long-term mechanism of real estate, and also the result of the financial regulatory authorities to curb the momentum of real estate finance and bubble.