The Central Bank of China will loosen credit control measures in the housing market after the third-quarter Board of Governors meeting. However, the minutes of the Central Bank Board of Governors meeting showed that one director did not support it. One director pointed out that there is no urgent need to relax measures at present and is worried about undoing the effects of previous controls; another director believed that if the housing market expectations change in the future and the trend may reverse, credit controls can be tightened again.
In the third quarter, the Board of Governors of the Central Bank of China decided to keep interest rates unchanged, relax controls on the housing market, adjust the maximum interest rate for second-family home purchases by natural persons, from 60% to 70%, and delete the requirement that land purchase loans be "tied to the commencement of construction within a certain period."
According to the minutes of the meeting, many directors believed that the effectiveness of the central bank's selective credit control has further emerged, and the concentration of real estate loans among all banks has continued to decline, and the second home purchase loan ratio can be appropriately relaxed; however, it is still necessary to continue to observe the development of the housing market and make rolling reviews or adjustments in a timely manner.
Among them, some directors pointed out that market expectations are still an important factor affecting the development of the housing market. The previous increase in the upper limit of the loan ratio by 10% had little impact on the housing market. However, this time it is increased by 10%, and the follow-up effects still need to be observed. If the psychology of housing market expectations changes in the future and the trend may reverse, selective credit controls can be tightened again to maintain the housing market in a "volume reduction and price consolidation" situation.
However, another director believes that the current real estate loan balance is still increasing, and the decrease in concentration is due to the increase in the denominator, that is, the total loan balance. There is no urgent need to relax controls at this stage. In addition, the proportion of consumers who are bearish on housing prices has declined. If this trend continues, loosening restrictions at this time may offset the effects of previous credit controls.
Directors who support the adjustment pointed out that manufacturing-related financing has expanded, and although the balance of real estate loans has increased, the growth rate has been slow, resulting in a decrease in concentration; at the same time, the balance of construction loans has declined, and the balance of policy loans such as home purchase loans for those who do not own their own homes and elderly reconstruction in urban areas has continued to increase, and the public's bearish rate on house prices is still higher than the bullish rate, so they support the adjustment.
Another director said that the flow of credit resources to the real estate market has been relatively slow, and the current housing loan interest rate is higher than before the introduction of control measures. Moderately increasing the loan ratio for second households can allow home buyers with good credit but relatively insufficient funds to obtain loans, which is also in line with bank credit risk control.
