(Yicai) March 19 -- Lending to households in China fell by CNY590.7 billion (USD82.1 billion) last month after climbing in January. But analysts predict a pick-up this month and next.

Household loans, mainly mortgages, rose by CNY389.4 billion in the first two months of the year, data released by the People's Bank of China showed on March 15. Based on January’s CNY980.1 billion increase, last month’s figure fell by CNY590.7 billion, according to Yicai’s calculations.

Banks usually front-load lending in the first month of the year, resulting in a drop in February, said Zhou Maohua, a researcher in China Everbright Bank's financial markets department. 

Lending was also hit by the lunar new year holiday, which fell in February this year and January last year, according to Song Xuetao, an analyst at TF Securities. And January's big jump from a year earlier sapped borrowing demand last month, Song added.

Short-term lending to households fell by CNY134 billion in the two months ended Feb. 29, while medium- and long-term lending rose by CNY523.4 billion, according to the central bank's data.

Besides seasonal factors, weakening property sales and lackluster consumption are also key market concerns behind the lending figures. Apart from the automobile, cultural, and tourism fields, overall consumption has been soft since the start of the year, Song noted, adding that the property sector is a factor to which the market is paying closer attention. 

The government has relaxed demand-side real estate policies, but time is needed for that to translate into sales and be reflected in the lending data, said Ming Ming, chief economist at Citic Securities. 

China's top 100 property developers sold CNY476.2 billion of new homes in the first two months of the year, down 52 percent from a year earlier, according to data from the China Index Academy. 

Consumer and business loans have become the household lending mainstays since 2022, replacing mortgages, for which demand has slumped, according to sources at financial institutions.

Medium- and long-term household loans rose by CNY634.3 billion in January, with business loans climbing by CNY316.3 billion and consumer loans and mortgages growing by CNY318 billion, according to calculations by Ma Tingting, chief financial industry analyst at Guosheng Securities.

Lending to households will rebound to some extent in March and April, according to analysts. The need for credit has not gone away, it has merely been delayed, Ming pointed out, adding that second-quarter lending may rise from a year ago.

Editors: Xu Wei, Martin Kadiev