Real estate loans in China, with a slower pace

China’s real estate loans increased in April at the slowest pace in eight years. At the end of that month, loans expanded 10.5% year-on-year, the lowest growth rate in eight years.

The China Banking and Insurance Regulatory Commission reported at a press conference that the balance of trust loans and the amount of wealth management products in the market also decreased.

In particular, the number of wealth management products associated with non-standard real estate assets fell by 36% year-on-year, said Liang Tao, vice president of the country’s main banking and insurance watchdog.

The flow of excessive capital into the market has been preliminarily curbed, the vice president said, adding that China will maintain strict measures against irregularities to prevent and mitigate risks..

According to information from Xinhua, Chinese statesmen pledged to ensure the stable and healthy development of the housing market and emphasize that “houses are for living in, not for speculation.”

For example, In 2017, loans grew at a slower pace due to strict acquisition rules and financial deleveraging. Average price increases for new homes decreased in the four largest cities, Beijing, Shanghai, Guangzhou and Shenzhen.

A few years ago, Economists rejected the hypothesis of a real estate bubble in this country, although specialists observed that the increase in the prices of the sector was gradually decoupled from the real wages observed in the main cities of the country.

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