China state media stokes speculation property crackdown may ease

The People's Bank of China released rare monthly data in a report on Nov 10, in an apparent attempt to calm concerns. PHOTO: AFP

BEIJING (BLOOMBERG) - China's bank lending to property developers rose sharply last month and the momentum is expected to extend into November, the country's flagship securities newspapers reported, adding to signs that credit conditions may be easing for the battered real estate industry.

The China Securities Journal, Shanghai Securities News and Securities Times all carried similar reports on Thursday (Nov 11) on their front pages, which elaborated on October credit data released by the People's Bank of China (PBOC) on Wednesday.

Mortgages also picked up in the month, the central bank said a separate report, releasing rare monthly data in an apparent attempt to calm concerns.

The newspapers did not reveal the amount of loans to developers last month, but all said an improvement in property-related lending data showed the authorities have started to dial back policies designed to curb speculation and leverage in the real estate market.

The PBOC's data showed overall loans to non-financial firms actually fell almost 70 per cent from September, although this does not give a breakdown of types of lending.

The data "showed that a 'marginal easing' has appeared in financial policy on housing, reflecting the official policy direction to maintain healthy development of the real-estate market and safeguard legitimate interest of homebuyers", the China Securities Journal quoted Zhixin Investment analyst Ma Hong as saying.

Chinese authorities have sent a series of signals recently - partly through state media - that they have been moving to relax controls on homebuyers and developers alike to curtail a credit crisis that is threatening growth prospects of the world's second-largest economy.

Chinese developers' bonds and stocks rallied on Wednesday after the Securities Times reported that the authorities are likely to loosen controls for real estate companies to issue local-currency notes.

Shares got a late-day boost on speculation - later reported by Cailian - that state-owned enterprises have asked regulators to adjust the "three red lines" lending limits for mergers in the sector.

Reflecting Beijing's intention to convey the property easing signal to the general public, the PBOC even put out a standalone report on Wednesday night to highlight the country's October home lending figures. The data showed outstanding personal mortgage loans rose 348.1 billion yuan (S$73.6 billion) month on month to 37.7 trillion yuan.

The release, separate from credit data posted earlier in the day, is rare because the PBOC has only provided quarterly figures for mortgages in the past.

The Securities Times said in a commentary that it is aimed at "addressing market concerns".

The China Securities Journal and Shanghai Securities News said their reports were "based on information from banks" while the Securities Times commentary did not say where it got the information.

Securities Times reported development loans surged since last month and struck a note of optimism over the future of the property industry.

"For real estate enterprises, the feeling of the recovery of the financing environment will become more and more obvious," the commentary said. "It is only the beginning of a recovery in terms of housing loans."

In another positive development for developers, the local government in the north-eastern Chinese city of Shenyang held a meeting with property developers and told them it will ease curbs on home purchases and sales, Cailian reported late on Wednesday.

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