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:

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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.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.