China presses housing panic button

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Here it comes! From Reuters:

China’s central bank has asked commercial banks to quicken the pace of extending home mortgages and to set mortgage rates at reasonable levels, four sources told Reuters on Tuesday, underlining efforts to support the cooling property market.

The sources said the request came at a meeting between the People’s Bank of China and some commercial banks on Monday.

Tight mortgages are considered one of reasons for the cooling of property market this year, as banks have raised mortgage rates for first-time home buyers or slowed the pace of extending mortgages due to tighter liquidity.

And from MNI:

The Chinese banking regulator has told the country’s banks to continue extending mortgage loans amid growing fears that the property market is heading for a fall.

It’s not an outright about turn by the looks of things (no RRR cut for example) but given this will combine with supply fears in the short term, taking profits on iron ore shorts might be prudent. Dalian up 1.6% today last I looked.

Houses and Holes

Comments

  1. Where is the kouklax – he should be all over this with a “I told ya so” plus some twitter quotes.

  2. Now it all becomes very clear – China’s government wants to know where all its property investors have gone.

    Per recent news reports, Australia’s Big 4 are apparently offering high roller foreign nationals loans to buy Australian property and are thus ‘steal’ them away from ongoing participation in certain off-shore property markets.

    Debt demand raiders!

    Of course volumes into Oz are probably insufficient to be the camel straw but wouldn’t it be terribly ironic if our Merchants of Debt assisted the destabilisation of the property market of a major trading partner and as a consequence its economy with their desperate attempts to keep their loan books inflating.

    If that happened we might catch some blow back!

    Just as well they are back stopped by the Oz taxpayer or they might be getting worried.

    • What on Earth makes you think it is high rollers?

      Australian banks are offering mortgages to anyone who can stump up a deposit and show the slightest indication of incomings in a bank account both directly and through subsidaries in both Singapore and Hong Kong

      Have a look through the press and real estate sites of both island cities.

  3. “…. taking profits on iron ore shorts might be prudent. Dalian up 1.6% today last I looked.”

    I see hope for those long positions.

  4. This time China’s property bubble really could burst – FT.com

    http://www.ft.com/intl/cms/s/0/6cd98926-d9e1-11e3-b3e3-00144feabdc0.html#axzz31Zw7vADm

    (if subscriber wall appears google search title)

    … excerpt …

    “The anti-corruption crackdown, often targeting individuals who have built up ostentatious property wealth, has poured cold water over the market, in which, according to a recent investment bank report, the richest 1 per cent of households is estimated to own about a third of residential property (my emphasis). Elsewhere, the tightening of credit terms, including funding costs for property developers, especially in the shadow banking sector, is taking its toll. Rates of return on commercial property and infrastructure, and cash flows for developers and local government, have been deteriorating.”