China continues clamping down on real estate speculation

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China’s central bank reaffirmed curbing loans to property speculation and banking system’s strict regulation has showed effects in major metropolises.

“Property is for living in instead of speculation.” said a regional finance report issued by People’s Bank of China Friday, quoting a principle decided by Central Economic Work Conference in December 2016.

However, due to the shortage of land supply and limited investment options, property prices are expected to further grow, the central bank said.

Therefore, the central bank in 2017 will continue to strengthen macro-prudential assessment on property loans in 2017 and strictly limit loans to property purchase out of investment and speculation purposes.

The curbs have eased property loans growth, especially in the first tier cities.

In the first half of this year, balance of property loans grew to 3.04 trillion yuan (452.6 billion US dollars), accounting for 38.1 percent in all loans, 2.3 percentage points down from the first quarter, according to data from the central bank.

Shanghai saw 118.92 billion yuan new individual housing loans in the first six months, 74.35 billion yuan lower than the same period last year.

(With inputs from Securities Daily)