Prudent policy will support housing sector

The country will maintain a prudent monetary policy to promote the development of the housing market, as risks in the sector remain under control, a vice-governor of the People’s Bank of China, the central bank, said on Friday.

“Reasonable increases in housing loans are necessary to meet the demand for housing purchases. Repayment amounts for housing loans have risen, but it is still within a reasonable range from a long-term perspective,” Pan Gongsheng, vice-governor of the PBOC, said at a news conference on the sidelines of the annual session of the 13th National People’s Congress.

In 2017, housing loans increased by 4 trillion yuan ($630 billion), up 22 percent year-on-year, compared to the 12.7 percent year-on-year growth of total yuan loans during the same period the previous year, according to Pan.

Risks remain under control in the sector, he said, citing the non-performance rate of housing loans that stayed below 1 percent, compared to 1.74 percent of the overall banking sector.

As for mortgage interest rates, he said the government will urge commercial banks to take a different approach in issuing housing loans, widening the interest rate spreads to meet market demand.

He added the government has noticed and will closely monitor some aggressive steps taken by some property companies and will strive to keep property markets stable.