By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-10 14:20

Figures from the Shanghai branch of the People's Bank of China show that housing loans in local Chinese-funded commercial banks in June rose by 4.55 billion yuan (US$598.25 million) or an astonishing increase of 429 percent from last month, according to the Shanghai Securities News today.

The individual housing loan rate at Shanghai-based Chinese-funded commercial banks remained on the rise during the first half of this year, with an increase of 560 million yuan in April and 880 million yuan in May alone, said the bank.

The uptrend is attributed to the bounce on property, said an anonymous official from the housing loan department of the Shanghai branch of theIndustrial and Commercial Bank of China.

Housing prices in Shanghai went on the rise in April, and the transaction volume expanded in May, said the official. He added the housing loan market will keep a steady rise in the second half of this year if there is no policy crackdown on the property market.

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Figures also show that new house loan transactions reached 4.37 billion yuan in June, accounting for 95.8 percent of the newly added new house loans in the first half of this year.

In the first quarter of 2007, Shanghai's newly added individual housing loans grew to 940 million yuan, with 60 percent from the second-hand housing sector.

In April, newly added second-hand housing loans accounted for 173 percent of new housing loans.

Insiders also said that financial gains from stock ownership have flown into the property market since June, contributing to the increase in property transactions.

In the first half of this year,renminbiloans provided by Shanghai's Chinese-funded financial institutions slowed. In May, the newly added loan transactions dropped 21.4 billion yuanyear on year, followed by a drop of 18.2 billion yuan in June.

The state owned commercial banks saw 43.01 billion yuan in newly added loans in the first half of this year, up 17.47 billion yuan year on year. Meanwhile, the newly added loan transactions at mid- and small-sized commercial banks dropped to 60.12 billion yuan, down 3.48 billion yuan year on year.