Can Banks Save China's Crumbling Property Market?

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BEIJING (TheStreet) -- China's biggest banks have been told it's their job to pull the nation's collapsing property market back from the brink.

Marching orders for the Industrial and Commercial Bank of China , China Construction Bank and other lenders were announced by the central bank Tuesday a few hours after the release of dismal market data for April.

New home sales by floor space fell 6.9% and by revenue declined 7.8% to 1.83 trillion yuan in April compared to the same month 2013, the National Bureau of Statistics reported. Those figures followed first quarter 2014 declines of 3.8% by floor space and 5.2% by revenue.

The People's Bank of China Web site said its Deputy Governor Liu Shiyu had discussed housing issues and speeding up mortgage approvals with executives from 15 commercial banks and the Big Five state-owned banks - ICBC, Construction, Bank of China, Agricultural Bank of China and Bank of Communications .

Bankers were told to "give priority" and "improve efficiency and give timely approvals" to mortgage applicants.

"It's a reasonable allocation of credit resources to give priority to... families for obtaining their own, regular commercial housing loans," the central bank Web site said.

Banks in some parts of the country, notably in cities and provinces near Shanghai, have reportedly been slowing or even freezing mortgage loans in the face of rapidly declining prices. Some developers have defaulted on construction loans and abandoned unfinished apartment complexes.