HK China Property Morning Post:PBOC to stay tightening on mortgage lending policies

PBOC to continue implementing existing mortgage policies in 2017

    The press quoting Mr Pan Gongsheng, Deputy Governor of People's Bank of China(PBOC), commented that PBOC will continue to implement the differentiated mortgagepolicies in 2017. He stated that the government would strengthen control on theproperty related financing to ensure a steady development of the property market. Webelieve this implies that PBOC has no intention to remove the existing tighteningmortgage policies or the more restrictive policies on developers' bond financing in theshort term. The new mortgage loan lending in Jan' 17 amounted to ~Rmb752bn,which is Rmb151bn higher than last Jan'16 and Jan'17 lending hit a new historical highon the monthly basis. We believe that the strong mortgage lending is related to the lagbetween sales and mortgage loan draw-down around the year-end, since the propertysales in the last two months of 2016 remained relatively strong. That said, we expectthe mortgage lending growth to be moderate in the near term given the weakeningproperty sales momentum and more restrictive mortgage policies.

    FY 17/18 residential land supply is expected to hit a new high

    Local press reported that the upcoming land supply for FY2017/18 is expected to bedeveloped into 30,000 residential units, up 5% against last fiscal year. Details arescheduled to be announced after the government releases the FY17/18 fiscal yearbudget this Wed (Feb 22nd). It should be a new high land supply level since the fiscalyear of 2011/12. The government is expected to add eight pieces of new land sitesthat will develop into 4,230 units, which are mainly located in the urban districts. Thegovernment has adequate residential land for development in the near term. However,the government still has to seek to prepare adequate residential land supply for themedium to long term development.

    Other key news

    China: Longfor issued Rmb3.04bn domestic bonds at 4.4%-4.67% coupon rate;HK: Primary launches continue to generate positive response, despite policies

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    FY16 results: Feb 22nd Hysan; Feb 27th Champ REIT & Times Prop; Mar 2nd HK Land; Mar16th Swire Prop; Mar 22nd COLI. 1HFY17 results: Feb 22nd NWD & Sino; Feb 28th SHKP