Growth of home mortgage loans slowed in Shanghai this year as the housing market cooled, the Shanghai headquarters of the People's Bank of China said in a statement yesterday.

Banks in Shanghai extended 37.76 billion yuan (US$6.08 billion) in home mortgage loans to individuals in the first half this year, 860 million yuan less than the same period last year, the statement said.

"Momentum in the market is weakening as new lending in the second quarter was 40 percent lower than the first half," the statement said.

That mirrored a cooler housing market as home sales in Shanghai fell 12.4 percent in terms of area in the first five months from last year, according to Shanghai Statistics Bureau data. That compared with a 7.4 percent decline recorded in the first four months this year.

Mortgages are a lagging indicator of home sales as banks usually take three months to approve applications.

Huang Zhijian, chief analyst at Uwin, a real estate information services company, said earlier this week that the city's housing market continued to be subdued with both real estate developers and home searchers remaining cautious.

National data for the first half showed home sales fell 7.8 percent by area and 9.2 percent by value.

Meanwhile, banks in Shanghai lent more for property and land development activities. New credit rose to 40.15 billion yuan in the first half, up 1.86 billion yuan from last year.