China's property loan growth slows amid tough purchase restrictions

BEIJING - Loans to China's real estate sector grew at a slower pace in the first quarter as government purchase restrictions remain in place in major cities, data from the central bank showed Friday.

By the end of last month, financial institutions had lent 40.52 trillion yuan ($6.02 trillion) to the property sector, up 18.7 percent year-on-year, according to a report from the People's Bank of China (PBOC).

The growth was 1.3 percentage points lower than the rate seen at the end of last year.

Outstanding loans for individual purchases went up 17.6 percent to 26.87 trillion yuan, retreating 0.2 percentage points from the end of last year.

The data came amid continued government efforts to rein in property speculation, particularly in major cities. Local governments have passed or expanded restrictions on house purchases and increased minimum down payments required for mortgages.

Home prices in 70 major Chinese cities went up on average in March, with new house prices in first-tier cities edging up 4.2 percent on a year-on-year basis, while that for second-tier cities and third-tier cities rising 12.2 percent and 11.4 percent, respectively.

A long-term mechanism to maintain sound development of the real estate market was called for earlier at the Central Economic Work Conference, under the principle that "housing is for living in, not speculation," which analysts said set the tone for China's property market regulation this year.