Lenders dim hopes of home ownership in China
Buying a flat remains a distant dream for many mainlanders as banks price mortgage loans higher and take a long time to approve applications
Many a mainlander received Lunar New Year wishes for the dream of home ownership to come true in the Year of the Horse, but the banks are providing a harsh dose of reality.
Lenders are tightening their mortgage policies, keeping the dream of owning a property just that for the millions priced out of the market.
While home loans are getting harder to secure, property prices may face downward pressure, analysts say, benefiting those who can afford to buy without a loan.
"Results from our latest survey on property loan information across major banks in major Chinese cities surprised us - in a bad way," said Edison Bian, an analyst with CCB International. "Credit conditions are far worse than we expected."
Bian expected the Hong Kong-listed mainland property stocks that he covered to trade at deeper discounts to their net asset value and had lowered his share price targets, he said in a research report last week.
He now expects Agile Property to trade at a 65 per cent discount to its net asset value, instead of the 55 per cent he expected earlier. For some developers, he has widened the discount by as much as 20 percentage points.