The bank said that this showed signs of tightening measures to control property prices and reduce leverage in the financial system.

The bank said that the continued regulatory efforts will slow down the growth in aggregate financing. But the Central Bank also faced a delicate balancing act to defuse the financial risks without in any way choking economic growth.

The mid and long term household lending - a proxy of mortgage loans - rose 432.6 billion yuan (HK$ 496.2 billion) last month down from 444.1 billion yuan in April and the previous monthly average of 486.7 billion yuan in the first quarter.

Major cities including Beijing and Shanghai have increased 'down -payment' requirements and strengthened controls on selling prices. They have also imposed restrictions on purchases by non-locals and second home buyers.

At the same time, the authorities have cracked down on homes built on commercial and office land to curb speculation and irregularities.

Mortgages and burgeoning household leverage are not major concerns now as tightening measures from major cities continue to take effect, said David Qu, an economist at ANZ Bank.

The Central Bank data also showed that loans grew 1.1 trillion yuan, as lenders lent more to corporates in the wake of Beijing stepping up measures to root out irregularities and trim leverage among financial institutions.

The measures included cleaning up bank's murky wealth management products and tightening rules on interbank lending, putting a lid on shadow banking and leaving less liquidity available for speculative investments in the equities market. (IPA)