MNI BRIEF: China's Q3 Bank Lending To Property Sector Up 3.2%

Chinese lenders saw continued soft credit demand from the struggling property sector in the third quarter even though reference lending rates have been reduced, according to data issued by the People’s Bank of China on Friday.

The outstanding loans of Chinese banks to the property sector totaled CNY53.29 trillion at the end of September, up 3.2% on an annual basis but weaker than the 7.9% pace at the end of 2021, according to the PBOC.

Meanwhile, outstanding mortgage loans stood at CNY38.91 trillion, rising by 4.1% y/y and 7.2 percentage points lower than at the end of last year.

The data indicates more supportive measures are still needed to stimulate the property sector even though the over-five-year Loan Prime Rate, the benchmark for long-term and mortgage loan rates, has been cut by 35bp this year. Advisors and analysts told MNI that there is still room for the over-five-year LPR to be cut by the end of 2022. (See: MNI PBOC WATCH: China Seen To Cut 5-Year LPR To Lift Property)