Beijing Has Mortgage Lending Standard: 25pc Total Lending
Mortgages only accounted for 28 percent of new lending in May, a new all-time low. Banks have a minimum standard of 25 percent. Since mortgages are 28 percent through May, they’ll have to fall to 21 percent for the rest of the year. The lending standard could also crush credit growth rates.
At the end of May, individual housing loans increased by 90.76 billion yuan compared with the beginning of the year . The proportion of newly added loans was 28% , which was lower than that in the first quarter of 2017 (37.6%) and 2016 (47%), down 9.3 and 18.7 percentage points, trending towards a reasonable ratio.
According to the report, Beijing banks have a target for mortgage lending: 25 percent of new lending. Since the ratio is 28 percent at the end of May, it requires a decline to 21 percent in the rest of 2017.
From January 2017 onwards, the People’s Bank of Operations in the MPA assessment to further highlight the credit policy-oriented effect assessment, in accordance with the macro-prudential requirements, to join the individual purchase loan growth factor, the Beijing area of all banks strict control of individual purchase loans Accounting for the proportion of all new loans, and the annual control target is determined to be about 25% of the reasonable level.
From the implementation of the situation, the first quarter of 2017 new personal purchase loans accounted for 36.1% of all new loans fell sharply from the fourth quarter of 2016 proportion of 67.4%, down about 31 percentage points. Especially as the main bank in Beijing, the main bank more obvious: ICBC Beijing Branch fell to 24%, Construction Bank Beijing Branch fell to 29%, Bank of China Beijing Branch fell to 15%, Agricultural Bank of China branch in Beijing fell to 35% , China Merchants Bank Beijing branch fell to 23%.
From these two words can be found, the Beijing area for the new mortgage accounted for the minimum standard control at 25%.
According to the May data, the current Beijing new mortgage accounted for 28%, if you want to reach 25% level, what will happen next?
According to the previous year lending of 605.9 billion yuan, and a 10% new loans growth rate, we estimate that in 2017 Beijing new loans may reach about 660 billion. 25% of that is 165 billion, that is, Beijing’s new mortgage size to control the level of 165 billion or so.
The first five months, Beijing banks have issued 90.7 billion housing loans, then that is, the next 7 months left 165 billion -90.7 billion = 74.3 billion or so the amount of loans.
Just to say, if the remaining 7 months to 2016 all new loans for the base calculation, according to 10% growth rate, then all the loans may also be issued about 340 billion.
In this case, 74 billion (74.3 billion) accounted for only 21.7% of the 340 billion, that is, if the future to achieve 25% of the new housing loans accounted for the target, the remaining 7 months, the proportion of mortgages in total lending can not exceed 21%.
To know that the 25% threshold can be said to be a minimum standard, if more than expected, then the future does not rule out the individual months of the new mortgage accounted for less than 15%, or even lower.
Beijing lending was 324 billion in the first five months. Plus 340 billion for the rest of the year comes to 664 billion. However, what if banks can’t offset the decline in mortgage lending? We’ll find out very soon if there are other borrowers prepared to step in to the gap created by the slowdown in mortgage lending.
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