What’s new: Chinese households borrowed more money to buy homes in the first quarter as mortgage rates declined, showing a positive signal in the sluggish real estate market, a central bank official said Thursday.
In the first quarter, monthly average mortgage lending jumped nearly 50% to 590 billion yuan ($85.9 billion) from the fourth quarter of 2022, said Zou Lan, director of the monetary policy department of the People’s Bank of China, at a regular press conference to discuss first-quarter financial data.
As of the end of March, 83 cities across the country lowered mortgage rates for first-home buyers, and the national average mortgage rate declined to 4.14%, 1.35 percentage points lower than a year ago, Zou said.
Lenders also increased lending to property developers by 570 billion yuan in the first quarter, Zou said. Real estate companies issued more than 150 billion yuan of domestic bonds, an increase of more than 20% from a year ago, showing positive results of the government’s policies to shore up the sector, the central banker said.
The background: China’s property industry grew 1.3% in January-March from a year earlier, a sharp rebound from the 7.2% decline in the final three months of last year and the first quarter of growth since the second three months of 2021, according to National Bureau of Statistics (NBS) data released Wednesday.
The data added to evidence that the property market bottomed out after the government ramped up support for major developers and cities loosened curbs on home purchases. That helped to bolster economic growth, which accelerated to 4.5% in the first quarter.
But property developers are still struggling. As of April 6, among the 50 publicly traded Chinese real estate companies that released 2022 results, 24 firms recorded net income declines, while 16 reported losses. Among those, the deficits of six topped 10 billion yuan ($1.5 billion), according to data from Wind Information Co. Ltd.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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