|
Shanghai residents - long considered some of the biggest savers in the world - have developed a healthy appetite for consumer debt as they buy new homes and private cars at an unprecedented rate.
Home buyers in the city took out a record high number of mortgages last year, while this year should see auto loans flourish in the city, the local branch of the People's Bank of China said in a report released yesterday.
Local lenders approved 109.08 billion yuan (US$13.14 billion) worth of mortgages last year, a whopping 45.2 billion yuan more than in 2001, the bank reported.
"Almost 20,000 local residents applied for housing loans last year," said the report.
Industry analysts point to China's entry into the World Trade Organization and the city's successful bid to the host the World Expo 2010 as the two main catalysts behind Shanghai's booming real estate market.
Shanghai won the right to host the expo on December 3, sparking an immediate increase in home sales. During the month, local lenders approved 6.56 billion yuan worth of housing loans, making it the busiest month of the year, the report said.
"For individual investors buying into the Shanghai market, the return on investment can be very attractive, fueled by China's entry into the WTO and the attractive environment in Shanghai," said property consultant FPD Savills Shanghai.
Average new housing prices in the city hit 4,700 yuan per square meter last year, a 9 percent increase over 2001, said Cai Yutian, director of the Shanghai Housing & Land Administrative Bureau.
The booming market is great news for local banks, as less than 0.5 percent of housing loans are nonperforming, compared with 6.81 percent for all bank loans in the city.
"It is a profitable business for all lenders to extend as many housing loans as they can," said Shen Qiang, an official with the Agricultural Bank of China.
While mortgages are expected to provide even bigger profits this year, car loans look to be a new cash cow for lenders in the city, according to the report.
The value of outstanding auto loans in Shanghai almost doubled last year to hit 4.1 billion yuan, according to the report.
Local residents purchased 60,000 private cars last year, a record high, according to the city government.
"Car sales in Shanghai are expected to keep soaring in the new year, driven by lower prices, more new products and greater availability of financing," said Shi Zhonghua, an analyst with China Securities.
(Shanghai Daily January 17, 2003)
|
