BEIJING: China's financial regulators pledged to keep credit growth stable in the property sector and help homebuyers affected by COVID-19 outbreaks to defer their mortgage payments, the central bank said in a statement on Tuesday (May 24).
Yuan loan growth tumbled in April as the pandemic jolted the economy and weakened credit demand, official data showed earlier this month.
Household loans, including mortgages, contracted by 217 billion yuan (US$32.6 billion), pointing to a deep freeze in the property market, a pillar of the economy.
The real estate sector, weakened by regulatory measures to curb excessive borrowing last year, has remained sluggish despite local government efforts this year to boost demand via cuts in mortgage rates, smaller down payments and subsidies.
The People's Bank of China (PBOC) in a statement on its website said it would use various tools to appropriately increase credit and support economic growth.
It would help small firms, home businesses and truck drivers, as well as homebuyers and consumers hurt by the economic impact of COVID-19 control measures, to defer paying their mortgages and other loans.
In a separate statement, the PBOC said it would guide financial institutions to go all out to boost lending.
China's economic activity plunged in April, as widespread lockdown measures confined workers and consumers to their homes and severely disrupted supply chains, leading many economists to revise lower their GDP growth forecasts for the world's second-biggest economy.
China on Friday reduced its benchmark reference rate for mortgages by an unexpectedly wide margin, a few days after a cut in mortgage loan interest rates for some homebuyers, in an effort to prop up the property market.
A Reuters poll showed on Tuesday that China's property market woes are likely to worsen this year with prices remaining flat and sales and investment falling further, while tighter and widespread pandemic curbs weigh on still fragile demand despite more policy easing.