CHINA’S central bank governor stepped up the rhetoric against rapid rises in home prices and continued credit growth, signaling further action on top of recent fresh curbs across a number of cities to cool their overheated real estate markets.

    Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), said the Chinese Government is “paying close attention” to rising property prices in some cities and will take appropriate measures to promote the real estate market’s “healthy development.”

    The remarks were made at a G20 meeting in Washington earlier last week and released by the PBOC on its website Saturday.

    Vice Finance Minister Zhu Guangyao echoed Zhou’s remarks in an interview with Xinhua News Agency, saying the government’s targeted measures to curb hot property prices were “timely and appropriate,” according to a Xinhua report late Saturday.

    The two top officials’ latest remarks signaled that China will continue to target property speculators and curb credit risks in the real estate sector to prevent bubbles.

    More than 20 Chinese cities, including Beijing, Guangzhou, Shenzhen, Suzhou, Chengdu and Wuhan, announced new restrictions on property purchases and mortgage down payment during China’s week-long National Day holiday in the beginning of October. The moves came as part of an effort to ward off property speculation.

    While a property boom has helped to support China’s economic growth, fuelling demand for everything from construction materials to furniture, it is seen as adding credit risks to the banking system and China’s debt problem.

    Zhou told the G20 meeting China will control credit growth as the global economy recovers.

    The International Monetary Fund said in August that China needed to slow its credit growth and stop funding weak firms, highlighting the worries among policymakers about the dangers of an unsustainable debt build-up triggering a banking crisis.

    Prices for new homes in the booming tech center of Shenzhen rose 36.8 percent from a year ago in August, while Guangzhou’s new home prices rose 21.1 percent over that period, National Bureau of Statistics (NBS) data showed.

    Other cities including Chengdu, Jinan, Wuhan and Zhengzhou have already announced new restrictions on property purchases as the government tries to dampen prices stoked by property speculators in second- and third-tier cities across the country.

    The average new home price in 70 major cities climbed an annual 9.2 percent in August, up from 7.9 percent in July, according to the NBS.

    Nomura analysts said the new measures were expected to help cool frothy prices in the biggest cities and should prevent the market frenzy from spilling over into smaller cities.

    “We also believe it unlikely that the latest tightening measures will cause the bubble to burst, sparking a collapse of home prices. We envision a more likely scenario to be a mild retreat or prolonged flattening of home prices in tier-1 cities,” they said in a note Tuesday.

    Central bank data showed that banks in August made 529 billion yuan in household loans, with mortgages accounting for 55.7 percent of that, and policymakers have expressed concerns over rising debt and banks’ exposure to mortgages.

    Still, market observers say the measures taken so far were less severe than those seen in 2013, as it remained easy to raise a cheap mortgage.

    Analysts said smaller cities that are showing signs of overheating are likely to tighten rules next, but they did not expect a nationwide tightening as the stock of unsold homes in most lower-tier cities remain high.

    (SD-Agencies)