China’s central bank said it will strictly tighten housing loans and limit speculation on real estate investments, in a bid to lend support to the Chinese government’s attempts to keep the country’s property market under check.

The People’s Bank of China (PBOC) said in its quarterly report on Feb 17 that the difference between China’s first- and second-tier cities from one side and third- and fourth-tier cities from the other in terms of prices and demand makes the country’s housing market somewhat special.

The central bank said it will work to strike a better balance between stabilizing growth, adjusting structure, curbing asset bubbles and preventing risks, so as to provide a “prudent and neutral” monetary environment.

On a macro level, the PBOC said that monetary circulation will be closely watched, while on a micro level, credit loans on speculative housing investments will be strictly limited.

The report said it will adhere to President Xi Jinping’s words during the Central Economic Work Conference last December that “homes are for living, not speculating.”

It further added that asset bubbles will be increasingly prevented, and financial risks avoided.

A Caixin report published on Feb 18 said that housing prices are essential in a country’s economy, indicating that a downward trend of housing prices could drag down the income of local governments.

“We will increase the monitoring of corporate debt risk, bank asset quality and liquidity, abnormal stock market fluctuations, use of insurance funds, property bubble risks, and cross-border capital flows,” the central bank said in the report.

The growth rate of housing loans in China was slower during the fourth quarter of last year, the report stated.

Of 70 large and medium-sized cities surveyed across the country, 46 saw prices for new residential housing climb month-on-month in December, down from 55 in November and 62 in October, according to the National Bureau of Statistics.