Banks cash in on housing

08:50, April 09, 2010      

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Commercial banks, including Tianjin branches of Industrial and Commercial Bank of China (ICBC), have set up second-hand housing transactions and information platforms to grab home loan market share as the real estate industry has boomed.

All 276 branches of ICBC (Tianjin) built networks in March, listing second-hand homes sales information. Some of the information is offered by local real estate agencies, with the rest collected by the banks, Wang Jing, an employee in the personal credit department with ICBC (Tianjin), told the Global Times Thursday.

"We set up cooperation relationships with four local real estate agencies including Jinfang Zhihuan Property and 21st Century Real Estate (Tianjin), who share part of their housing resources with us, and we also have our own housing resources," Wang said.

"The buyers, who purchase the houses offered by ICBC Tianjin branches and get loans from the banks, only need pay 50 percent of the total agency fees to the real estate agencies," Wang said. "They only need to pay 500 yuan ($73.25) of the valuation fee for each deal if they get home loans here no matter where the original housing resources come from."

In Tianjin, buyers normally need to pay realtors fees of 1 percent of the price of the home they buy, and the valuation fee always accounts for 0.5 percent of the total value as estimated by property assessing institutions. Since the platform was launched March 10, buyers have made on-the-spot inspections of more than 100 houses listed on it, Wang said.

"We firmly believe that the number of transactions will increase quickly due to ICBC's reputation," she said. "We are also negotiating with some developers and planning a platform for the newly-built houses."

Other commercial banks including Construction Bank of China (Tianjin) and the Beijing branch of Communication Bank of China (CBC) have all launched similar second-hand housing transaction platforms since March.

"We offer this kind of complex service with the aim of attracting more customers to get loans from our bank," an employee responsible for personal credit with the Beijing branch of CBC was quoted by China Real Estate Business as saying.

The second-hand housing market's boom is the major cause for banks' enthusiasm in setting up this kind of platform, analysts said.

"Financial risks of home loans are much lower than other types of loans, and the banks thronged to grab that big cake, especially when the market flourished," Jin Ruixin, a researcher at Centaline Property Agency (Beijing), told the Global Times Thursday.

Sales of second-hand residential properties in Beijing last month reached 25,747 units, an increase of 201.35 percent over the previous quarter, according to a recent report by the China Realty Research Center.

There are concerns that the market share of second-hand housing agencies will be squeezed by banks, but Jin said that was not the banks' original goal.

Source: Global Times


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