<p>Bloomberg cited informed sources reporting that the mainland real estate market continues to be sluggish, with falling property prices leading to millions of mortgages facing &#34;negative equity&#34; situations, increasing the risk of losses for banks and homeowners. The report indicated that several state-owned banks are even reducing market risks by offering mortgage grace periods. On the other hand, Morgan Stanley slightly lowered its economic growth forecast for China this year by 0.1 percentage points to 4.7%, reflecting the policy flexibility in the context of lower inflation starting points in China.</p>
<h2>Repayment grace periods of up to two years</h2>
<p>The report pointed out that several state-owned banks have proactively contacted cash-strapped borrowers and offered them mortgage repayment grace periods of up to two years. They also stated that some banks are working with clients to help them find home buyers instead of declaring defaults and repossessing properties.</p>
<p>In fact, the downturn in China's real estate market has entered its fifth year. During the previous property boom, buyers took on debt to purchase homes, but after prices fell, they found themselves in awkward situations. According to private sector data, property prices in major cities like Beijing and Shanghai have dropped by more than a third from their peaks, with declines far exceeding official data, while the price drops in lower-tier cities are even more severe.</p>
<h2>Morgan Stanley lowers China's growth forecast by 0.1 percentage points</h2>
<p>Additionally, Morgan Stanley slightly adjusted its economic growth forecast for China this year, lowering it from a predicted growth of 4.8% to 4.7%, and indicated that rising oil prices will have an impact under the baseline scenario.</p>
<p>The bank's baseline scenario assumes that oil prices will remain at $110 per barrel in the second quarter before falling back. The bank also predicts that this year's baseline scenario for China's PPI will rise by 1.2%, and CPI will rise by 0.8%</p>

601398

515020

601939

<p>The mainland real estate market continues to be sluggish, with falling property prices leading to millions of mortgages facing negative equity risks, increasing the loss risks for banks and homeowners. Several state-owned banks are offering mortgage repayment grace periods of up to two years to assist cash-strapped borrowers. In addition, Morgan Stanley has lowered its forecast for China's economic growth by 0.1 percentage points to 4.7%, reflecting policy flexibility and the impact of oil prices</p>

Stheadline

ICBC

ChinaAMC CSI Banks ETF

Huaan CSI Banks ETF

Bank Of China

Bank Of Communications

China Merchants CSI BANK AH Price ETF

WP CSI Banks ETF

Fullgoal CSI 800 Banks ETF

BANKCOMM

BANK OF CHINA

Hwabao WP CSI Banks ETF

China Southern CSI Banks ETF

The risk of negative equity in the mainland property market increases, and it is reported that state-owned banks are offering mortgage grace periods