Mortgages surge to August high

   Date:2007/09/11     Source:
New individual mortgages surged by the most in a month since 2005 in Shanghai in August, with the central bank yesterday cautioning commercial banks on relevant risks.

Individual mortgages totaled 7.13 billion yuan (US$946 million) in August at domestic banks in Shanghai, up 1.26 billion yuan from the July figure. That was the biggest monthly leap since 2005, said the Shanghai headquarters of the People's Bank of China yesterday.

"We reminded commercial banks to closely watch asset price fluctuation and interest rate trends and their effects on borrowers' payment capacity," the central bank said.

Among the new mortgages, loans for new property were 4.62 billion yuan while lending for second-hand property totaled 2.51 billion yuan.

The property market has picked up in Shanghai since March.

For instance, the average housing price for Shanghai's used apartments continued to jump last month with transactions remaining stable.

The city's second-hand housing index, which tracks prices for used apartments, rose 6.03 percent to 1,930 in August, the index complier said yesterday.

Meanwhile, loans for cars totaled four million yuan in August at domestic banks, turning around a three-year decline in the sector.

Foreign exchange lending also surged in August on concerns of rising domestic interest rates and the anticipation of more rises, the central bank said.

China has raised its interest rates four times this year. The one-year benchmark interest rate sits at 7.02 percent, up from 6.12 percent at the end of last year.

New forex loans added US$1.74 billion in August in the city, up US$1.9 billion than the figure a year earlier, posting a record single-month high in about three years.

In other banking news, corporate deposits added 68.58 billion yuan in August at domestic lenders, up 50 billion yuan than the figure a year ago.

Corporates channeled the money back to bank accounts as new share issues slowed down during the month. The frequent interest rate rises this year have also attracted cash back to banks.

Yuan savings at domestic banks added 40 million yuan, down 9.82 billion yuan from August last year.

New yuan deposits kept rising at overseas banks, adding 3.41 billion yuan in the first eight months of the year. About 99.3 percent of the savings are in overseas banks which have incorporated locally in Shanghai, including Citibank, HSBC, Standard Chartered and Bank of East Asia.
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