According to a newspaper report published on Monday, even if housing prices in China drops by sixty percent, it won’t have any impact on the default rate on loans sanctioned by the China Construction Bank (CCB)  

CCB is the largest bank in China who lends money to home buyers. According to the 21st Century Business Herald, the bank default rates on loans would then only increase if property prices drops by sixty three percent.  

All the banks in China has been asked by the China Banking Regulatory Commission to conduct stress tests to find out that in case of the crashing down of the property market how they could fair.

According to analysts if worse comes to the worst then China might see the drop by sixty percent, though the chances of that are very remote.  

According to the Chinese Newspaper CCB has taken preventive measures and thus they are not worried.

The CCB, considered as the world’s second biggest bank by market value, in its second quarter reports, clearly stated that it had restricted its lending to the housing sector.  

According to the bank credits of that kind grew by five decimal six percent during the first half from the end of previous year. Its outstanding loans to the property sector declined and reached seven decimal zero eight percent from seven decimal four four percent.  

CCB is confident about its views regarding property stress test which the bank feels will come out consistent.  

In a report Bank of Communications stated that it would see a rise in its bad loans of mortgage business in the tune of just one decimal two percent if the housing prices fall by fifty percent.  

If that happens then non-performing mortgage loans of China Merchants Bank would also go up by two percentage points as per reports by local media.