In China, falling property prices in the eastern city of Wenzhou triggered $1 billion (6.4 billion yuan) of bad loans as buyers abandoned homes and stopped making mortgage payments, according to the country's Economy & Nation Weekly.

China’s slumping property market is a drag on the world’s second-biggest economy and banks’ profits, with lenders’ soured loans increasing for almost three years. New home prices fell last month in 64 of 70 cities tracked by the government.

Buyers of 1,107 properties stopped payments as prices dropped for 34 consecutive months, Economy & Nation Weekly reported, citing data from a banking regulator. A press officer at the Wenzhou branch of the China Banking Regulatory Commission declined to confirm the data, the Xinhua News Agency-affiliated magazine reported on its website.

In Wenzhou, real estate lending accounts for 26% of outstanding bank loans, 8 percentage points higher than the national level, according to the report, which didn’t specify a time period for the data.

Approximately 56% of homes in the city were abandoned because of falling values and most were high-end apartments, according to the report. Homes also were abandoned by borrowers left with liabilities after making guarantees for companies in financial trouble, the report said.

The city’s economy expanded 6.8% in the first half, according to the local government, compared with a 7.4% expansion nationwide. China’s economy is forecast to expand 7.4% for the full year, the slowest pace since 1990.

More than 3 million people lived in Wenzhou at the time of the 2010 Chinese census. The area under its jurisdiction (including two nearby cities and six counties) had more than 9 million people at that time. The city's coastline opens on the East China Sea.

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