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China News: Around 20 Banks Have Stopped Making Home Loans

China News recently reported that the “first tier” real estate cities (Beijing, Shanghai, Guangzhou, and Shenzhen) have all been increasing home loan interest rates. Cities in the second and the third tiers are following suit. China has been tightening up the real estate market in an effort to control the ever-increasing housing prices. The banks are seeing a sharp decline in terms of business volume. Their response is to introduce an interest rate hike on those who will have to buy a home no matter where the market is heading. According to new market study statistics, out of 533 banks in the home loan market, around 170 banks have lowered interest rate discounts, 244 banks have switched to the standard (government set) interest rate, 20 banks have even stopped providing home loans. The Chinese government’s current policy of restricting home loans is taking effect. The housing market is expected to cool down and banks are expecting a much lower profit level.

Source: China News, June 10, 2017