Banks extended more mortgage loans in Shanghai last month after home sales rebounded strongly in September, the central bank said Monday.

Outstanding mortgage loans at banks in Shanghai rose 570 million yuan (US$85.8 million) in October, the Shanghai headquarters of the People's Bank of China said yesterday. The figure in September shrank by 480 million yuan as fewer new mortgages were issued compared with the amount customers paid back.

October's increase in home loans was the first since July.

Home loans lag property sales as it takes about one month for banks to process a transaction once a sale is completed.

Outstanding mortgages on second-hand homes rose 580 million yuan, while that for new homes dipped 10 million yuan even though new home sales rose.

This month, new mortgages are expected to slow as would-be home buyers take a wait-and-see attitude due to new tightening measures.

The city's existing housing index rebounded in September, ending a three-month decline.

The index, which tracks price fluctuations of existing homes across the city, gained 6 points, or 0.23 percent, to 2,549, the Shanghai Existing House Index Office said.

New home sales rose to a nine-month high in Shanghai in September due to an abundance of supply.

Sales of new homes jumped 82 percent over August to 1.33 million square meters in September, the highest monthly volume since January, Shanghai Uwin Real Estate Information Services Co said.

The figure excludes homes designated for relocated residents under urban redevelopment plans.

New house space totaling 1.71 million square meters was released in September, compared with 810,000 square meters in August. The September volume was the highest since September 2006, according to Uwin.