China’s central bank asked financial institutions in Shanghai, the country’s premier commercial city, to track real-estate loans this year to keep lending growth at a steady pace and curb excess investment.
‘The development of the real estate market is one of the main influences on loan growth’ in Shanghai, the People’s Bank of China said in a report on its website yesterday.
China is stepping up measures to curb lending that’s fuelling a surge in real estate prices and to maintain social stability.
The average property price in China’s 70 largest cities rose 5.4 per cent in April from last year, a gain of 0.7 percentage point, according to a survey by the country’s top planning agency. New home prices in Beijing rose 10.7 per cent last month.
The average price of new housing in Guangzhou, southern China’s largest city, surged 23.4 per cent last year, spurred by economic growth that averaged 10 per cent in the past five years. New housing prices rose 16.7 per cent in Beijing and 4.8 per cent in Shanghai last year.
Shanghai’s new loans may grow by 180 billion yuan (S$36 billion) this year, while deposits may rise by 300 billion yuan, the central bank said.
Consumer prices in the city may rise 2 per cent this year, while gross domestic product may grow 10 per cent, according to the report.
Source: The Business Times, 31 May 2007
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