BEIJING, March 19 (Reuters) - China will control rapid flows of bank credit to the property sector to help contain risks, the head of the country’s top economic planning agency said on Sunday.
This comes at a time when Beijing has pledged to contain debt and property market risks in 2017, following years of credit-fuelled expansion.
“We will control the excessive flow of credit into the real estate sector,” He Lifeng, head of the National Development and Reform Commission, told the China Development Forum in Beijing.
Large amounts of capital has entered the property market, driving up property prices in first-tier cities and some second-tier cities and pushing up costs for the real economy, he said.
Data on Saturday showed China’s red-hot property market picked up pace in February, after a slowdown in price gains in the previous four months.
Central bank governor, Zhou Xiaochuan, said earlier this month that government measures to cool rising house prices will slow mortgage growth to some degree, but housing loans will continue to grow at a relatively rapid pace.
Household mortgages accounted for 39 percent of China’s new loans last year.
Vice Premier Zhang Gaoli, speaking to the same forum, said the government was trying to prevent risks in the property sector. “There could be property bubbles if we do not handle the situation well,” Zhang said.
China will continue to implement city-based policies to reduce real estate inventories in smaller third- and fourth-tier cities, Zhang said.
Many local governments in cities which have seen the sharpest price rises have rolled out a series of restrictions over the past few months on buying and ownership. (Reporting by Kevin Yao; Editing by Himani Sarkar)