New individual loans in Shanghai hit a record last year mainly on the strength of surging mortgages, the central bank said yesterday.

New individual loans topped 125.16 billion yuan (US$18.32 billion) in the city last year, up from 114.45 billion yuan in 2008, the Shanghai headquarters of the People's Bank of China said yesterday in a statement.

These loans accounted for 25 percent of total new lending in Shanghai last year.

"Individual mortgages and auto loans increased rapidly on measures to support domestic demand," the central bank said.

Both property prices and transactions have risen rapidly since March last year. End-users and investors dashed into the market in fear of further price increases, triggering demand for mortgages.

Last year, home loans grew 99.58 billion yuan, up from 93.78 billion yuan in 2008. Loans for first-home buyers hit 38.93 billion yuan while second-home lending reached 60.65 billion yuan.

In Shanghai, prices of existing homes rose to an average of 14,700 yuan per square meter in December, an annual surge of 41 percent. Prices of new homes rose to an average 20,187 yuan per square meter in December, up 65 percent on year.

China shifted to a relatively loose monetary policy last year to revive economic growth after the global downturn.

In 2009, banks in Shanghai extended 481.39 billion yuan of new yuan-backed loans, up 208.06 billion yuan from a year earlier.

Domestic banks slowed credit extension quarter by quarter last year as the central government urged banks to contain risks.

Meanwhile, foreign banks started extending more credit in the second half of last year.

Foreign banks were conservative in the first half but shifted strategy in the second half due to China's economic growth.

Most newly added corporate loans were in the service industry and to small- and medium-sized companies.

Shanghai's total outstanding loans were valued at 2.96 trillion yuan at the end of 2009, up 22.9 percent from a year ago. Bank deposits in the city grew 25.4 percent year on year to end at 4.46 trillion yuan.