China Property Loans Fueling Market

China Property Loans Fueling Market

Commercial News » Asia Pacific Commercial News Edition | By Francys Vallecillo | October 23, 2013 1:36 PM ET

The amount of property loans issued by China's banks increased during the third quarter, providing further evidence that government measures are failing to cool the market. 

Home buyers and property developers borrowed 600 billion yuan ($98.47 billion) from Chinese banks during the third quarter, compared to 589.7 billion yuan the previous quarter, according to Reuters. The total amount borrowed was 44 percent higher than a year ago, data from the central bank showed.  

The increased flow of property loans is among the reasons for the continued climb in home prices, analysts say. Despite various efforts to curb property sales and home prices, activity keeps growing in the world's second-largest economy. 

The National Bureau of Statistics reported this week a 34 percent yearly increase in home values, despite a three-year government effort to tame the hot market. 

Total property loans issued during the first nine months of the year reached 1.9 trillion yuan, increasing from 917.6 billion yuan a year ago.

Outstanding mortgages were 21 percent higher than a year ago by the end of September, while loans issued to developers reached 3.43 trillion yuan, increasing 15 percent from a year ago. 

New loans for public housing construction reached 113.4 billion yuan in the first nine months, accounting for 28 percent of all loans to property developers, Reuters reports.

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