China central bank rejects media report that some mortgage lending suspended

BEIJING (Reuters) - The People's Bank of China (PBOC) on Tuesday rejected a media report which said the central bank had told some banks in cities with overheated property markets to stop issuing new home loans. Citing unidentified sources, Bloomberg reported that central bank branches in those cities communicated verbally with some lenders and told them to stop distributing new home loans, without specifying the timeframe for the suspension. The PBOC told Reuters that the report was "false", and that it didn't order commercial banks to suspend mortgage lending. Speculation has been rife in Chinese social media that banks in certain cities are temporarily suspending mortgage lending. But local government-backed newspapers in Guangzhou, Nanjing and Jinan have denied the rumours. New household loans, mostly mortgages, fell to 433.1 billion yuan in October from 637 billion yuan in September, central bank data showed, suggesting demand for mortgages is cooling after a spate of steps by local governments to restrict home purchases to cool soaring prices. Still, the ratio of new household loans to total new loans rose to 66.5 percent from 52 percent in September, due to lower overall lending, the data showed. Two of China's major cities - Shanghai and Tianjin - said this week they would impose fresh borrowing restrictions to cool their hot property markets, as authorities fret that price growth will rebound after showing only modest signs of abating. Home and residential land prices have soared in many parts of China this year, prompting authorities to impose a range of restrictions on buyers and curbs on developers' ability to raise funds. The central bank said earlier this month that it will maintain ample liquidity in the economy while taking steps to prevent asset bubbles, adding that the balance between stabilising growth and preventing bubbles has become more challenging. (Reporting by Yawen Chen and Ryan Woo; Editing by Kim Coghill)