China's property loan growth slows in second quarter

Outstanding property loans on the books of China’s major financial institutions grew 40.2% year-on-year by the end of June, down from 44.3% in the first quarter, the Wall Street Journal reported, citing a statement by the People’s Bank of China (PBoC). New property loans in the first half of 2010 amounted to US$204 billion, although no details were given as to the value of outstanding loans in the sector. Total outstanding loans for home purchases rose 49.6% year-on-year to the end of June, down from 53.4% at the end of March. Outstanding loans to property developers also slowed to 26.1% at the end of June compared to 31.1% at the end of March. The news comes after June figures showed a slight decrease in average house prices. An HSBC report released Monday argued that home prices may drop by as much as 15% over the next six months to one year as a glut of supply hits the property market.