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July 21, 2009

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Home » Business » Real Estate

New home prices climb as loans surge

PRICES of China's new homes in 36 large and medium-sized cities rose 6.25 percent last month from a year ago, as bank loans surged in the first half this year, the National Development and Reform Commission said yesterday.

The average price of new homes in the 36 cities rose to 6,554 yuan (US$959) per square meter, the top economic planner said. Last month's figure was 1.09 percent higher than May's.

Government data showed bank lending hit a record 7.37 trillion yuan in the first six months, as the government looked to a moderately easy monetary policy to support economic recovery. The figure exceeded the full-year target of 5 trillion yuan.

Last month, home prices in 70 large and medium-sized Chinese cities rose for the first time this year by 0.2 percent year on year.

In the first six months, a total of 341.1 million square meters of homes were sold, up 31.7 percent from a year earlier. The value of sales surged 53 percent from a year ago to 1.58 trillion yuan, the National Bureau of Statistics said on July 10.

The NDRC said home prices are expected to continue the upward trend.

To prevent possible risks on the property market posed by a surge of bank loans, the China Banking Regulatory Commission has urged lenders to stick to rules on mortgages for second home buyers and step up scrutiny over approvals.


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