THE growth in real estate lending in Shanghai continued to weaken in the first three quarters amid the sluggish property market, the city's banking regulator said yesterday.

The outstanding value of property loans rose 24.68 billion yuan (US$3.6 billion), or up 4.3 percent, in the first nine months to 599.3 billion yuan at the end of September, the Shanghai Bureau of the China Banking Regulatory Commission said yesterday. The rise is 7.8 percentage points lower than the industry's average loan growth, the local regulator said.

New real estate loans also saw a drop quarter on quarter. In the first quarter, the new loans totaled 13.28 billion yuan, then fell to 8.69 billion yuan in the second quarter and dropped to 2.7 billion yuan in the third quarter.

Individual mortgages also recorded a lukewarm performance in the third quarter. The outstanding value of individual mortgages at all banks in Shanghai rose 11.6 billion yuan in the first three quarters to 313.49 billion yuan.

New individual mortgages tumbled to a low in March, jumped to a yearly high in July and then went south in August and September. The drop in people buying their first homes is the main reason for the decline in individual mortgages in the third quarter, the regulator said.

In the third quarter, second-home loans climbed 3.16 billion yuan, accounting for 90 percent of the new individual mortgages in the period.

Meanwhile, home buyers from overseas and other provinces also took the lion's share of the new individual mortgages in the first three quarters of the year.

Individual mortgages made by out-of-Shanghai home buyers rose 6.95 billion yuan in the first three quarters, far higher than the 4.65 billion yuan in home loans taken out by local residents.

There was no increase in sour loans despite the sluggish market.

Sour property loans fell by 490 million yuan in the first three quarters to 4.64 billion yuan while the non-performing loan ratio dipped 0.12 percentage point to 0.77 percent as at the end of September, the regulator said.