Loans to China's property developers down slightly in Q2

Beijing

BANK lending to China's property developers cooled slightly in the second quarter but remained at high levels, official data showed on Wednesday, underlining the government's efforts to get lenders to support the struggling property market.

Developers took 4.88 trillion yuan (S$1.07 trillion) worth of loans by the end of June, up 20.9 per cent on an annual basis and slower than a 24.1 per cent rise at the end of March, central bank data showed.

In a sign of a nascent recovery in the housing market, mortgages rose 17.8 per cent by the end of June from a year earlier, quickening from growth of 17.6 per cent by the end of the previous quarter.

Beijing has tried to revive the housing market as it looks to arrest an economic slowdown, but banks are worried about bad debts and are not passing on policy steps such as interest rate cuts and lower downpayment requirements to home buyers.

Increased demand for property loans, however, reflects improved home sales as recent government moves to boost the sector have started to gain traction.

Official data last week showed property sales measured by floor space rose 16 per cent from a year earlier, marking the third consecutive month of positive growth.

The government in the past few months has relaxed tax rules and cut downpayments for second-home buyers. Those pro-growth policy measures also included four cuts to benchmark interest rates since November. REUTERS