China's property loan risk within control

BEIJING - China's banking regulator stressed on Friday that risks in the property loan sector are within control, easing fears that the country's cooling housing market will drive up non-performing loans and threaten the broader financial stability.

Outstanding non-performing loans in the property sector amounted to 21.44 billion yuan ($3.47 billion) as of the end of last year, with the bad loan ratio at 0.48 percent, according to a report released on Friday by the China Banking Regulatory Commission (CBRC).

The share of property loans in total banking lending is not high, which means risks from the sector are under control, said Wang Junshou, an official from the general office of the CBRC.

Possible risks from China's property loans have come under the spotlight in recent months as the housing market is losing steam.

Official statistics showed new signs of cooling in the property sector in April, with more Chinese cities reporting month-on-month drops in prices and fewer cities reporting gains.

Of a statistical pool of 70 major Chinese cities, new homes in eight cities saw month-on-month price declines in April, double that for March.

The new dynamics in the once red-hot housing market increased the default risks of some developers, alerting authorities to strengthen monitoring in the sector.

The CBRC said in the report that it will pay high attention to key regions and businesses, and continue to strengthen supervision to prevent individual cash chain breaks from spreading.

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