Realty Credit Growth Slows Down, Mortgages Soar in Shanghai

Shanghai witnessed a slowdown in credit extension for property development projects in the first half of this year, due largely to macro control measures such fewer approvals for new housing projects and interest rate hikes.
Sources with the China Banking Regulatory Commission Shanghai Branch said on Wednesday that by the end of June, Chinese commercial banks in the city recorded 486.1 billion yuan (US$ 64.4 billion) in outstanding loans for commercial real estate development projects, an increase of 17.6 billion yuan from the beginning of the year, or up 7.30 percent from the same period last year. The growth rate was 2.9 percentage points lower than the level a year ago.
Real estate projects accounted for 31.7 percent of total loans, down 1.1 percentage points from the beginning of the year, the sources said.
However, Shanghai saw a surge of home loans for individuals in June.
According to the local banking industry watchdog, loans made by Chinese commercial banks for individual home buyers reached 4.5 billion yuan last month, 5.3 times the amount in May, or double the accumulated credit for the same purpose in the first five months.
The industry regulator said the sharp increase was not a result of mounting demand for housing to be used by buyers themselves, but for speculation. It warned of the risks of bogus mortgages and illicit credit extensions for home buying.
By the end of June, the outstanding bank loans for individual home buyers amounted to 255.3 billion yuan, an increase of 68 billion yuan from the beginning of the year, or up 3.37 percent on the same period last year.
(Xinhua News Agency July 25 2007)2007-07-25 15:59:22Realty Credit Growth Slows Down, Mortgages Soar in Shanghaicredi,mortages,realty,slow,soar1007Real Estatewww.china.org.cn/enpproperty-->