No worries on property loans
0 
China's banking regulator said yesterday that property loans for development and for individual purchases are stable as it curbs risk exposure with various measures.
"So far the asset quality of property development loans and individual mortgage loans is stable as we are curbing risk exposures from speculation with various measures," said Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission, in Beijing yesterday.
Property loans accounted for 20 percent of outstanding loans in the country, Wang said, without giving the value.
Banks in China extended 9.21 trillion yuan (US$1.35 trillion) of new yuan credit in the first 11 months of 2009 and there are indications that new loans for the whole of last year may close to 10 trillion yuan.
"We keep a close eye on property credit risks," Wang said. "We support healthy and stable development of the market."
The State Council, or China's Cabinet, on Sunday issued a notice demanding a tighter scrutiny of the property market, reiterating the 40 percent down payment directive and stating that interest rate on second home loans should be strictly in line with the applicant's creditworthiness.
Mu Huaipeng, a People's Bank of China official, said regulators encourage commercial banks to support buyers who need loans to buy homes for their own living, rather than for investment or speculation.
The government has taken a tougher stance since the second half of 2009 to cool the rapidly rising property prices in major cities like Shanghai and Beijing.
"The central government is rolling out measures to cool the property market," said Terence Lau, an Ernst & Young partner in Shanghai, yesterday. "More direct measures are likely in the future if the market shows no signs of slowing. The government still has weapons to cool the market."
The PBOC said on Tuesday that reserve ratio requirement on commercial banks will rise 0.5 percentage points from next Monday, the first increase since June 2008.
Read more: http://www.shanghaidaily.com/article/?id=425667&type=Business#ixzz0cYsPzMIN
