THE growth in property loans in China slowed in 2011 amid a weaker housing market, the central bank said yesterday.

Banks in China extended 1.26 trillion yuan (US$200 billion) of new property loans last year, down 770.4 billion yuan from a year earlier. It accounted for 17.5 percent of new loans issued last year, a drop of 9.4 percentage points from a year ago, the People's Bank of China said.

"The growth in property loans weakened last year due to restrictive policies in the real estate industry," the PBOC said in a report.

The government's toughest-ever policies imposed last year against speculation in the real estate market to tame housing prices have started to take effect.

According to the National Bureau of Statistics, housing prices in December fell on a monthly basis in 52 of the 70 cities tracked by the bureau. They fell in 49 cities in November, 34 in October and 17 in September.

In Shanghai, Beijing, Guangzhou and Shenzhen, where home purchase restrictions have been rigorously enforced, new home prices fell by between 0.2 and 0.5 percent from a month earlier in December.

Meanwhile, new yuan loans fell 390.1 billion yuan from a year earlier to 7.47 trillion yuan in 2011.

"Because of the tight monetary policies last year, many companies turned to short-term loans (of less than one year) and bonds for financing. There was a sharp moderation in longer-term loans among manufacturers due to the economic slowdown," the PBOC said.

The mid- and long-term new loans to manufacturers fell 281.9 billion yuan from a year earlier to 517.1 billion yuan last year, the central bank added.

Amid global economic uncertainties, analysts estimated China may set a target of 8 trillion yuan in new yuan loans this year to support growth.

 

Source:shanghaidaily.com