As the current housing market in China is an investment-oriented market, it is no problem for banks to issue housing mortgage loans when housing prices rise, because the value of housing mortgaged by buyers has been rising, the value of housing mortgage is getting higher and higher, and the risk of bank loans is getting smaller and smaller. At this point, banks will definitely regard housing mortgage loans as quality assets. Because this kind of loan is not only high in amount but also low in risk. However, as an investment product, housing is purchased through bank credit leverage, so the price of such housing investment products will inevitably be pushed up. When the house price rises to a certain extent and is far away from the real estate value, the bubble in the real estate investment market will inevitably burst, and the periodic adjustment of the real estate market may occur at any time.
As an investment-oriented real estate market, when the market is periodically adjusted and house prices begin to fall, the huge risk of banks issuing such loans is self-evident. Because once the market starts to adjust, no one can predict how big the price adjustment will be and how long it will take. Faced with the huge uncertainty in this market and the possible rapid adjustment of housing prices, banks will face great risks if they engage in such housing mortgage loans easily again. In this case, banks will stay away from this business for self-protection.
We can see that with the explosive growth of internet finance and the prevalence of shadow banking in recent years, the interest rate in the domestic financial market has risen in an all-round way, which will naturally increase the loan cost of banks. If banks issue low-interest housing mortgage loans again, it will not only have low returns, but also be risky. This forces banks to lend to other places with higher returns and lower risks. Even if you don't issue loans and do bank wealth management products, you will have higher income and lower risk than mortgage loans.