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August 13, 2009

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New mortgage loans increase

MORTGAGE loans helped shore up new yuan lending in Shanghai last month as home buyers dashed into the property market, central bank figures showed yesterday.

Chinese banks extended 11.43 billion yuan (US$1.67 billion) in new individual mortgage loans last month in Shanghai, accounting for two-thirds of new yuan loans in the city, the Shanghai headquarters of the People's Bank of China said yesterday.

The new mortgage loans were 8.63 billion yuan more than the year ago level.

"Individual mortgage loans grew rapidly due to the rise in property transactions," the Shanghai headquarters of the central bank said in a statement.

Individual mortgages for new homes totaled 5.66 billion yuan last month, up 4.31 billion yuan.

Mortgages on second-hand homes hit 5.77 billion yuan, up 4.32 billion yuan.

Home buyers are dashing into the property market as prices rise rapidly. Many fear that home prices will continue to escalate.

Prices of new homes and existing properties soared in Shanghai last month. The average price of new homes, excluding those for residents relocated for urban redevelopment projects, rose 1.6 percent to 15,770 yuan per square meter, the highest since June 2008. The average price climbed for the fifth straight month.

Prices for second-hand homes gained 2.8 percent to 12,760 yuan per square meter last month.

Meanwhile, household savings dropped last month for the second straight month as people invest in the rising stock market.

Household savings shrank 330 million yuan last month compared with a savings increase of 8.1 billion yuan a year ago.

The decreasing savings indicate that residents have more confidence in investment, the central bank said.

The Shanghai Composite Index has gained 71 percent this year.


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