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There's been much debate over whether or not the government's measures have managed to cool China's property sector. But latest data shows that housing demand is back to reasonable levels.
Long and middle term loans issued to residents usually refer to those designated for housing purchase. In July, about 12.6 billion yuan was added to the figure. That's the slowest growth since the beginning of this year, and the third consecutive monthly decline.
Zhao Xijun, Economist of Renmin University of China said "Buyers are waiting for a better time. They don't believe prices will rise. That shows housing demand has returned to reasonable levels, indicating the government's measures are working."
Loans issued for housing development are also declining. Data shows the figure in the second quarter was down 60 percent.
In addition, the central government also said it would continue to implement a differentiated loan policy in the second half this year.
All these ingredients are expected to prevent the property market from overheating again.
Lian Ping, Chief Economist of Bank of Communications said "Developers have borrowed in all together 400 billion yuan in the first half. Due to tightened controls by regulators over this kind of lending, commercial banks will continue to keep it at a low level. I think the figure will be less than 200 billion for second half."
The figures relieve fears the government could further tighten lending policies.
- China's housing market calms in July 2010-08-11