Mortgage loans hit a new high of over 12 trillion yuan, while construction financing hit the largest decline in the past 10 years

The Central Bank announced today (27th) that the balance of National Bank mortgage loans in September exceeded 12 trillion yuan, climbing to 12.23429 billion yuan, a record high, and the annual growth rate also rebounded to 5.02%; however, construction loans (commonly known as civil engineering financing) continued to be cold Sigh, the balance dropped to 3.497229 billion yuan in September, declining for 7 consecutive months, and the annual growth rate even dropped to minus 0.99%. Not only did it have negative growth for 4 consecutive months, it also recorded the largest decrease in the past 10 years, showing that the trends in housing loans and construction financing are obviously divergent.

Central bank officials pointed out that the rebound in the growth of home purchase loans in September was related to the increase in transaction volume in the housing market. However, it was partly affected by the different landing points of the folk customary months in the lunar calendar. It remains to be seen whether the housing market has truly picked up.

Officials explained that this year’s lunar folk custom month falls from August 13 to September 10, while last year it fell from August 23 to September 21. The number of days affected by the folk custom month in September this year was 11 fewer than last year, which helped to push up the housing market transaction and mortgage data in September. Therefore, it cannot be concluded that the housing market has recovered significantly.

In addition, after the launch of New Qing'an 3.0, the balance of New Qing'an loans accounted for 14.45% of the total balance of housing purchase loans in September, rising from 14.26% in August.

While housing loan balances continue to rise, construction financing has shown a cooling trend. Central bank officials pointed out that the balance of construction loans has decreased for seven consecutive months, and the annual growth rate has also shown negative growth for four consecutive months, and the decline continues to expand. This is mainly related to the successive repayments after the completion of construction projects and the reduction of new construction projects, reflecting that the financing demand of builders is still weak.

Central bank officials said that from the data observed in the past one or two years, the growth rate of construction financing has continued to decline slowly, and the trend has not changed significantly.

It is worth noting that after the September meeting of the Board of Supervisors, the central bank has relaxed the maximum percentage of second home purchase loans for natural persons from 60% to 70%, and canceled the requirement for land purchase loans to be completed within 18 months, in an attempt to appropriately respond to market demand for funds. However, construction financing continues to experience negative growth, and it remains to be seen whether relevant policy adjustments can drive a recovery in builders’ financing demand.