Bank lending to China’s property sector continued to grow at a slower pace in the third quarter of the year as the country’s home market has cooled considerably since the beginning of this year.
Outstanding loans made by Chinese banks to the property sector totaled 16.74 trillion yuan ($2.7 trillion) at the end of September, up 18.2% from a year earlier, the People’s Bank of China said Tuesday. The growth was 1 percentage point lower than that of a quarter earlier, the central bank said.
The slower growth in loans to the property sector reflects uncertainties in China’s flagging home market, which poses one of the biggest risks to the world’s second largest economy.
Property developers have been cutting home prices to attract buyers amid rising inventory levels in many cities. The average price of new homes declined 1.1% in September from a year earlier, compared with a 0.5% gain in August, official data showed.
Outstanding loans for property development totaled 4.18 trillion yuan at the end of third quarter, up 22% from a year earlier. The growth rate was 1.7 percentage points lower than that of the second-quarter, said the central bank.
Outstanding mortgage loans to individuals rose 17.5% from a year earlier to 11.12 trillion yuan at the end of third quarter, said the central bank.
China’s central bank loosened mortgage restrictions at the end of September, allowing some existing homeowners to enjoy preferential lending rates and terms extended to first-time buyers. Analysts predicted that the move will boost mortgage loans in months ahead.