(Bloomberg) -- China’s home market has continued to contract, with the total amount of money lent out to buy homes shrinking from a year earlier for the first time on record.
The outstanding amount of individual mortgages fell to 38.6 trillion yuan ($5.4 trillion) at the end of June, down 260 billion yuan from the same period a year earlier, according to data from the People’s Bank of China released Friday. That’s the first year-on-year drop in the data going back to 2011.
The amount of mortgages also fell almost 1% from the end of March, which is only the third time it has recorded a quarter-on-quarter contraction. That indicates people across the country repaid more money than was borrowed in new mortgages in the April-June period, showing the housing market shrinking again after a short-lived rebound.
China’s overall real estate sector contracted in the second quarter, reversing the first expansion in the sector since 2021 recorded in the January-March period. The market looks to have weakened further in July, with the weekly average of new housing sales by floor space in China’s tier-one cities on track to hit a six-month low, according to Bloomberg calculations based on data provided by China Real Estate Information Corp.
Total loans to the property sector grew by 260 billion yuan to 53.7 trillion yuan from a year ago, the data showed. Outstanding loans for property development rose by 610 billion yuan.
©2023 Bloomberg L.P.