New home loans in China dropped a staggering 93 percent in July, month on month. The figures were released by the People's Bank of China.

In the last month, Beijing's financial institutions offered mortgage loans worth 160 million yuan, far less than June's 2.4 billion yuan. July is the third consecutive month that home loans fell by more than 40 percent, after the government announced tightening policies.

Banking industry experts say lenders have also tightened criteria for property developers. As a result, developers are struggling to raise capital. The property industry has dropped from first to fifth, in terms of sectors acquiring new loans.

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