Source: Securities Times Author: Wu Jiaming.

On July 4, it was reported that several commercial banks in Shenzhen required that personal housing mortgage loans can only be issued after the main structure is capped. In other words, banks will only issue personal housing mortgage loans for housing projects whose main structures have already been capped. The relevant regulations will be officially implemented from the 5th.

In response, the reporter interviewed two bank loan managers including Bank of China, and the reply was that the above message is true, and the relevant regulations will be officially implemented from the 5th. The reporter will also continue to follow up on this.

Market sources pointed out that the above regulations actually originated from the "Notice on Further Strengthening the Management of the Real Estate Credit Business" (hereinafter referred to as "Document No. 121") issued by the People's Bank of China in 2003, which clearly stipulated that commercial banks must ensure when issuing personal housing loans. The main structure of the purchased house has been capped. In addition, on September 27, 2007, the People's Bank of China and the former China Banking Regulatory Commission jointly issued the "Notice on Strengthening the Management of Commercial Real Estate Credit" (referred to as "Document No. 359"), which also reiterated this requirement.

Some real estate insiders have stated that during the prosperity of the real estate market, due to different actual conditions in various regions, most cities did not strictly enforce Document No. 359. Some developers or people obtained personal housing mortgage loans in advance by false supervisory monthly reports and other sealed materials, which buried hidden dangers. Banks should continue to follow up on the situation of real estate projects, take active measures, and strive to promote the stable and healthy development of the real estate market.

In recent years, issues caused by delayed delivery of some real estate projects have received widespread attention, and the supervision of pre-sale funds and bank loan policies have been repeatedly mentioned. Many places have issued detailed rules for the management of pre-sale funds for commercial housing, clarifying the responsibilities of all parties and requiring that pre-sale funds should be deposited in a bank's special supervision account and not be withdrawn or used at will. In terms of lending policies, reporters have found that many places have also raised relevant requirements. For example, as early as 2022, there were reports that Qingdao area requires all real estate projects to be capped before banks can issue mortgage loans.

With the increase of regulatory intensity, strictly implementing the "cap first and then loan" policy will also become the norm. Yan Yuejin, research director of E-House Real Estate Research Institute, emphasized that in 2003, the central bank had already issued relevant policies, but there were some deviations in implementation in various places. It is currently necessary to re-learn the spirit of such policies and strictly implement the central bank's policies on mortgage lending based on the current demands and appeals of homebuyers and from the perspective of preventing "unfinished buildings" and financial risks.

Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, believes that during the upward period of the real estate market, some developers had tight capital chains, and some banks wanted to do more mortgage business, so some banks would choose to "break through" policies and use edge ball tactics to compete for more mortgage shares. In fact, "cap first and then loan" is an effective measure to prevent unfinished buildings. From the current situation, returning to the essence of the policy is not only to prevent unfinished buildings, but also to ensure the safety of bank loans. Strictly implementing this policy is definitely good news for ordinary people and government supervision.

Editor/Lambor