Mortgages Tightened in Several Cities

Two important signals show that China seems to be tightening home mortgage loans, reported Securities Daily. 　

Home loans help third-and fourth-tier cities reduce stocks of unsold housing, but lead to higher house prices in first- and second-tier cities, said China’s top banker Zhou Xiaochuan. Mortgage lending will continue to grow this year, but the growth will slow down as policy adjustment kicks in. 　

Since February, many urban banks, including those in Beijing and Shanghai, have raised the minimum interest rate for a first mortgage to 90 percent of the benchmark rate. Of the country’s 533 banks, in February only 99 provided an interest rate for mortgages that was lower than the 90 percent mark, down by 29 from January. 　

Another signal is that the mortgage approval cycle has been lengthened. Banks generally slow down loans in the fourth quarter when bank credit is tight, an unnamed real estate agent told Securities Daily, and lengthening the cycle in first quarters is rare and usually signals that banks are tightening mortgages.