BANK loans to property developers in Shanghai fell 9.6 percent last year as the Chinese government's harsh measures on the real estate market to curb speculation and price rises made it difficult for them to get funding.

The developers saw loans drop to 74.1 billion yuan (US$11.8 billion) in the city last year, the Shanghai Statistics Bureau said yesterday in a report on its website. Comparatively, the loans increased 28.6 percent in 2010.

Apart from banks loans, the property developers in Shanghai managed to get a combined 320.7 billion yuan last year from other sources but this amount dipped 0.7 percent from a year earlier, the bureau added.

The only category of funds to see an annual increase was internal capital, which rose 11 percent, while foreign investment in the developers slumped 54.7 percent and other investments dipped 1.1 percent, the bureau's data showed.

Shanghai was among the cities nationwide that posted slower price rises in real estate following the central government's tough regulations since early 2010, including buying curbs, higher lending rates and increased down payments on second homes.

Although the austerity measures were effective in fending off speculative investment in Shanghai and prevented the housing prices from rising quickly, they also hurt demand from home seekers and led them to adopt a wait-and-see stance.

The developers sold 17.7 million square meters of homes in Shanghai last year, a decline of 13.8 percent.

Meanwhile, property investment in Shanghai rose 9.6 percent to 217 billion yuan last year, helped by the construction of affordable housing, whose investment jumped 43 percent to 47.9 billion yuan.

Premier Wen Jiabao has said China will continue to raise the supply of ordinary houses and government-funded affordable homes.
 

Source:shanghaidaily.com