China’s Hidden Personal Mortgage Problems
Who’s to say that China, supposedly avoiding the brunt of Suprime mortgage problems, doesn’t have looming mortgage problems of its own? China is, after all, in a housing bubble of its own, and when prices come back to reality (read: affordable levels), there may be more than a handful of people who are unable or choose not to continue paying their mortgages. One sign of growing exposure to mortgages is the amount of residential loans that banks hold. From this week’s Modern Weekly:
Personal Mortgages in China Surge
The rapid rise of housing prices in China has brought with it a sizable increase in the scope of personal mortgages at banks throughout China. By the end of the first half of this year, personal mortgages made up 24% of the loan portfolio of the average Chinese bank. The increase at individual banks ranged from 10%-30% year over year, with the Industrial and Commercial Bank of China holding the largest amount of personal mortgages, totaling 452.5 billion RMB.
