State lender reports uptick in mortgage loan applications
One of China’s “Big Six” state-owned banks said there are tentative signs that housing demand is recovering.
At its annual earnings call, Bank of Communications (BoCom) said new mortgage applications – a timely indicator for housing activity – were roughly 15% higher in March than the 2025 average.
- BoCom is one of China’s largest mortgage lenders, meaning its comments likely reflect broader trends across the banking sector.
The bank added that its outstanding mortgage balance may stop contracting this year and gradually start growing again if current momentum persists.
ICYDK: China’s total stock of commercial mortgages peaked in early 2023 and has since declined roughly 5%, as households paid down more loans than they took out.
Get smart: Rising mortgage demand tracks with recent reports that secondhand housing markets are warming up across major cities.
- Together, these are signs that demand is mending on the margin, though a nationwide recovery will likely take much longer.
Get smarter: Any improvement in mortgage demand would be a positive development for the banking system.
- Mortgages are among banks’ highest-quality assets, generating reliable long-term income.
- Stronger mortgage demand would help reduce pressure on bank profitability.