Mortgage demand has eased somewhat in China since central authorities vowed last month to stabilize the country's property market. Still though, unfavorable interest rates mean that most banks are erring toward prudence when considering loans for prospective home buyers.
The People's Bank of China has only made oral instructions to expand mortgage services. The continued absence of written directives reflects a lack of resolve to intervene on any specific aspect of the banking sector.
Despite government moves to monitor and control the industry, commercial lenders still have to ensure the security, liquidity and efficiency of their lending operations.
Unfortunately, the security side of the equation is being compromised by weakening real estate prices in several key urban markets. Liquidity is a concern as well since personal mortgage loans typically take between 10 and 30 years to mature.
Based on the above factors, there is little possibility of easier monetary policies for the property industry over the near-term.
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