CHINA S four biggest banks were reported yesterday to have stopped issuing any new loans to property developers for the rest of the year. Two of the banks, however, denied this late in the afternoon.
China Real Estate Business reported that Industrial & Commercial Bank of China (ICBC), China Construction Bank, Bank of China and Agricultural Bank of China had met their allotted loan targets for the year. Approvals of new loans had ceased since the end of October, the report said.
Agricultural Bank of China and China Construction Bank Corp. denied the report, Caixin Online reported yesterday, quoting unidentified people at the banks.
Wang Zhenning, a Beijing-based press official at ICBC said he wasn t clear about the issue. Yang Yan, a press official at Construction Bank, couldn t immediately comment. Calls to the other two banks press offices weren t answered.
China s property prices rose at the slowest pace in 10 months in October after the government raised interest rates and expanded measures to limit the risk of asset bubbles in the world s fastest-growing major economy. New local-currency lending was 587.7 billion yuan (US$89 billion) last month, more than the median 450 billion yuan forecast in a Bloomberg News survey of 25 economists.
The central bank raised interest rates last month for the first time in three years and this month increased lenders reserve requirements as cash from October s larger-than-forecast US$27.1 billion trade surplus threatened to add to the risk of asset bubbles and accelerating inflation.
M2, the broadest measure of money supply, rose 19.3 percent last month from a year earlier, the central bank said. Measures to ease gains in real estate prices included suspending mortgages for third-home purchases and a pledge to speed up trials of property taxes.
Consumer prices rose to the fastest pace in two years in October, building the case for the central bank to add to last month s interest-rate increase. Consumer prices rose 4.4 percent from a year earlier, boosted by food costs, a statistics bureau report showed Nov. 10.
Policymakers may introduce more measures in the fourth quarter amid signs of a price recovery, according to Nomura Securities Co. The likely policies include a property tax and the enforcement of the so-called land added-value levy in the overheated cities, the brokerage said in a Nov. 4 report.
The introduction of a property tax may cause housing prices to drop between 15 percent and 20 percent, Citic Securities Co. said Nov. 3. The tax may affect economic growth by 0.48 to 0.64 percentage points by slowing real estate investment, the brokerage said. (SD-Agencies)
