The People’s Bank of China (PBOC) is persuading lenders and financial institutions to accelerate the housing loan process especially for first-home buyers to alleviate the cooling Chinese property market.

PBOC deputy governor Liu Shiyu said that accelerating mortgage growth could help the slumping Chinese housing market. Domestic home sales fell by 18 percent in April based on National Bureau of Statistics (NBS) data, Global Property Guide reported.

Cooling measures were implemented four years ago in more than 40 cities across China, including the top-tier markets of Beijing, Shanghai, Shenzhen and Guangzhou, to curb soaring property prices. Some cities also introduced property tax, raised the deposit and imposed limits on the number of homes that citizens can purchase, which directly impacted home sales.

The central bank’s call to fast track mortgages is “credit positive” for China-based developers, who, faced with seven-month high borrowing costs on the mainland, are now tapping credit from ASEAN neighbours such as Singapore to finance housing developments, including luxury homes, according to Bloomberg.

“An expedited loan-approval process would lead to more timely disbursement of funding for home buyers and subsequently boost developers’ cash collection rates,” said Kaven Tsang of Moody’s Investor Service team.

Source: www.property-report.com