Home Loan Market Booming in China

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Last updated at: (Beijing Time) Monday, November 25, 2002

Home Loan Market Booming in China

The market for home loans is booming in China, according to figures released at the on-going Housing Finance Forum in south China's Shenzhen.

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The market for home loans is booming in China, according to figures released at the on-going Housing Finance Forum in south China's Shenzhen.

The Industrial and Commercial Bank of China (ICBC), the country's largest commercial bank, said its total home loans had reached 355 billion yuan (42.9 billion US dollars) on October 31, or 6.6 times more than the figure in 1997.

The proportion of home loans in the bank's lending business grew from 2.2 percent in 1997 to 12.7 percent this year, and individual home loans increased by 38 times over five years, said Zhao Jianji, deputy general manager of ICBC housing finance department.

"The housing finance business in China has entered a phase of fast development and become a new economic growth point," he said.

ICBC owns property worth more than four trillion yuan, with loans topping 2.8 trillion yuan, and has supplied home loans to over two million Chinese families.

All commercial banks in China are battling for a share of housing financial market, and banks in the large cities of Beijing, Shanghai and Guangzhou are witnessing greater competition.

China's housing market will face faster development, real estate analysts say, predicting that 550 million square meters of housing space will be completed annually in the next few years.

Meanwhile, 150 million more rural people will turn to be urban residents before 2005, generating a huge demand for living space.

Of the current 460 million urban dwellers in China, or 130 to 140 million families, some 35 million families will need loans if one in four families purchase new homes.

Zhao said that by the year 2005, ICBC would increase the proportion of home loans in its lending business to 15 percent, and individual loans would account for 12 percent of all the bank's lending business.

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