Lending to Chinese Property Sector Expected to Cool


Following a spike in loans towards the end of last year lending towards the Chinese property sector is expected to cool in the near term.

The “2016 Q4 Financial Institution Lending Direction Statistical Report” released by the People’s Bank of China indicates that as of the end of December 2016 the balance of RMB property loans was 26.68 trillion yuan, for year-on-year growth of 27% and a month-on-month rise of 0.5 percentage points.

The full year increase was 5.67 trillion yuan, while growth in property lending comprised 44.8% of growth in all lending during 2016.

Given the strong trend in financial allocations towards the property sector last year, analysts anticipate a marked reduction in property loans in 2017 as banks make further efforts to adjust their lending structure.

During the release of the latest round of annual reports, many banking executives indicated that they would implement differentiated property lending policies this year.

The China Banking Regulatory Sector also recently issued its “Emergency Notice On Special Investigations into the Development of Property-related Business by Financial Organisations in the Banking Sector,” whose focus includes down payment loans and real-estate development loans.