China Home Loan Market Competition Forecast & Opportunities, 2028

The China Home Loan Market is expected to experience substantial growth during the forecast period, driven by increasing marketing strategies, automation of the loan process, rising household construction, and growing digitalization.

The primary and most costly goal for a majority of individuals is homeownership. Constructing a house requires significant effort from the buyer, and the most viable way to fit the property within their budget is by obtaining a home loan. Home loans can finance the purchase of a new house or apartment, the acquisition of land for construction, as well as home improvements, expansions, and repairs.

Since 1,978, China has witnessed a notable rural-urban migration, resulting in a significant population increase in the 35 largest metropolitan regions. This migration has substantially driven the demand for housing in these major metropolitan areas. Furthermore, with the rise in employment opportunities and disposable income, the need for larger residential spaces has also increased.

The escalating cost of housing in China is expected to fuel market growth. The rising housing costs have become a concern for the entire society, as ordinary families find it increasingly challenging to afford a home. The pressure to secure available housing options has led to discontentment with the high housing costs. Despite the government's implementation of control measures to stabilize home prices, these efforts have not been successful in slowing down the price surge. The persistently high home prices have severely hindered the healthy growth of the national economy. The formation of real estate bubbles poses the risk of economic stagnation, while excessive housing costs give rise to various social and economic issues. Consequently, the home loan market will be directly influenced by the increasing demand for housing loans.

In the primary market, mortgages are primarily offered in the form of commercial personal loans and Housing Provident Fund (HPF) loans. Hybrid mortgages, which combine the maximum amount of HPF and commercial mortgages, have been introduced to address the limitations of HPF loans that sometimes fall short of closing deals due to the high cost of housing. The majority of mortgages in the market are commercial mortgage loans. Therefore, the rise in housing prices will directly impact the China home loan market.

Increasing Household Construction Will Boost the Market Growth

The macroeconomic and socioeconomic development of a country is significantly influenced by the construction of new homes. New housing development has a substantial direct and indirect impact on the overall loan market. This holds particularly true in countries with economies that are predominantly driven by construction, such as Spain and China. The Chinese government initiated housing market reforms to improve living conditions for urban residents and accommodate the influx of immigrants from rural areas. As a result of these reforms, there has been a notable surge in housing demand and price growth, leading to increased construction of new homes. A significant number of people migrated from rural to urban areas in search of employment opportunities, driven by rapid economic growth. The housing reforms provided families with the opportunity to purchase more comfortable homes. The growing demand for enhanced living conditions further propelled home prices, attracting more capital and loans for the development of additional housing projects. China allocated USD29 billion in special financing to complete these housing initiatives, resulting in the launch of numerous new construction projects and real estate enterprises in urban areas. Thus, all these factors played a pivotal role in shaping the home loan market in China.

The Low Interest Rate of Home Loans in China Will Drive Market Growth

China has permitted banks to lower the limit on home loan interest rates. The People's Bank of China and China's Banking and Insurance Regulatory Commission state that the purpose of this action is to support housing demand and foster healthy growth in the housing market. In response to weak market demand, Chinese authorities are easing restrictions on home purchases in certain locations. Major domestic real estate player, Evergrande, has reported increasing liabilities, and other businesses have experienced a significant decline in revenues. In addition to the drop in interest rates, loans are being processed more expeditiously. Home loans account for nearly one-fifth of all bank loans in China. Across the country, applicants receive their loans in approximately a month, with 19 cities taking less than 20 days. Therefore, the anticipated market growth in China will be driven by the lower interest rates of home loans.

Market Segmentation

The China Home Loan Market is segmented based on type, end user, tenure period, region, and competitional landscape. Based on type, the market is further fragmented into home purchase, refinance, home improvement, construction, others (re-sale, etc.). Based on end user, the market is segmented into employed individuals, professionals, students, entrepreneur, others (homemaker, unemployed, retired, etc.). Based on tenure period, the market is segmented into less than 5 years, 6-10 years, 11-24 years, and 25-30 years. On the basis of region, the market is divided into North, East, North-East, South-Central, North-West, South-West.

Company Profiles

ICBC Co., Ltd., Bank of China, China Construction Bank Corporation, Agricultural Bank of China Limited, Hua Xia Bank Co., Limited, Industrial Bank Co., Ltd., China Everbright Bank Co., Ltd., Postal Savings Bank of China (PSBC), China CITIC Bank International Limited and China Merchants Bank Co., Ltd. are the major players in the China Home Loan Market.

Report Scope

In this report, China home loan market has been segmented into following categories, in addition to the industry trends which have also been detailed below:

China Home Loan Market, by Type:

• Home Purchase
• Refinance
• Home Improvement
• Construction
• Others

China Home Loan Market, by End User:

• Employed Individuals
• Professionals
• Students
• Entrepreneur
• Others

China Home Loan Market, by Tenure Period:

• Less than 5 years
• 6-10 years
• 11-24 years
• 25-30 years

China Home Loan Market, by Region:

• North
• East
• North-East
• South-Central
• North-West
• South-West

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in China home loan market.

Available Customizations

The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

This product will be delivered within 1-3 business days.