Beijing city reports slowest mortgage growth in five years as gov controls property market

BEIJING: China’s capital Beijing has reported its slowest growth in outstanding mortgage loans in five years, state news agency Xinhua said, as government controls help damp down the property market.

The city’s outstanding mortgage loans increased by just 9.6 billion yuan (1.07 billion pounds) in the first six months of this year, compared with 103.2 billion yuan in the same period last year, according to the Beijing operations office of the central People’s Bank of China, Xinhua said.

The city’s outstanding mortgage loans by the end of June rose 4.6 per cent year on year, the slowest growth in five years, the report added.

But banks extended more loans for public housing, it said.

Outstanding loans for real estate development rose by 40.8 billion yuan in the first half, 67 per cent of which went to public housing development, the report added.

China’s property investment posted its weakest growth in six months in June as developers faced fresh curbs and tighter funding conditions, with sales also slowing, in a sign one of the economy’s key drivers was losing steam.

Chinese authorities have sought to defuse a housing bubble since 2016, as part of a broader effort to temper financial risks stemming from years of debt build-up.

But policymakers have also been careful not to trigger a sudden crash.

Separately, Xinhua said that while measures to curb price rises had generally been successful, some developers where still causing problems by trying to “drive up” prices, affecting market stability.

Some local governments were not helping matters as they had an outdated understanding of economics, thinking they could boost development by driving up property prices, it added. — Reuters