Lending for property purchases in the first eight months of the year surged 51 per cent from the same period a year ago, despite intensified government efforts to cool the stubbornly red-hot sector, the National Bureau of Statistics said yesterday. Banks issued loans totalling 358.4 billion yuan. Mainland developers raised a further 539.7 billion yuan in capital, up 23.4 per cent from the first eight months of last year, the bureau said. That contributed to the total of 1.63 trillion yuan developers invested in the past eight months, up 28.1 per cent from a year earlier. The property outlook index dipped slightly last month, dropping to 103.31 at the end of August from July's 103.51 points, the bureau said. Still, it was up 1.55 points from a year earlier. The index takes into account property prices, sales volumes and consumer confidence and represents the overall well-being of the real estate industry. A reading above 100 indicates positive or improving conditions. The bureau data shows foreign investment in property development rose 35.8 per cent in the first eight months, against a rise of 34.2 per cent in the first seven months. At the same time, expanded investment helped boost the amount of vacant commercial property to 121.69 million square metres by the end of last month, up 13.1 per cent year on year. The vacancy rate for residential property increased 11 per cent, to 66.44 million square metres. 'If the vacancy rate keeps going up like this for another couple of months or even longer, a bursting of the bubble will be near at hand,' said Zeng Gang , of the Chinese Academy of Social Sciences' Financial Research Institute. The central government has imposed a slew of measures recently to dampen the housing market, but the bureau's statistics seem to indicate that these cooling measures have yet to have any effect. The deposit interest rate for a state-run fund that helps people finance property purchases was raised three weeks ago, following the announcement of an increase in benchmark interest rates. 'Symbiosis between sectors works differently in China,' Mr Zeng said. 'Increased interest rates may not result in more expensive capital and a decline in housing purchases because property development loans are largely obtained on an administrative basis, regardless of interest rates.'