There Are Now 40% More Chinese Property Loans Than Just One Year Ago

China Balloon

Outstanding property loans held by Chinese financial institutions in June were 40.2% higher year over year according to the People’s Bank of China (PBOC). The total fell 4.1% when compared to March data, thus there has been an absolute decline most recently.

Still, a staggering $203.5 billion in new property loans have been created year-to-date as of June as per the PBOC.

China Daily:

New lending to property developers stood at 162.5 billion yuan during the first six months of 2010.

Total outstanding loans to property developers rose 26.1 per cent year-on-year by the end of June, down 5 percentage points compared with figures notched at the end of March and down 4.5 percentage points from the end of 2009.

The statement also said total outstanding loans provided for home purchases grew 49.6 per cent from one year ago as of the end of June, up 6.5 percentage points from the end of 2009, but down 3.8 percentage points from the end of March this year.

At the same time, average transaction prices for property managed to rise slightly, after having fallen slightly previously.

Capital Vue:

The average transaction price of newly built commercial properties in 36 major Chinese cities rose 0.74 per cent month-on-month to 8,542 yuan per square meter in June, reports Yicai.com, citing the National Development and Reform Commission. The rate of growth declined by 0.07 percentage point from the rate of growth recorded in May.

Things have definitely cooled, at least for the time being, but the question is how many of the property loans outstanding might turn into bad loans for the banks.

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