--Vows support for first-home buyers as crackdown on speculation threatens to trigger a property slump in China--

The central bank in China will increase support for construction of affordable housing and ensure that “loan demand from first-home families” is met, the People’s Bank of China said on its website yesterday.

A government clampdown aimed at make housing affordable is cooling market prices and driving down transactions as Europe’s sovereign-debt crisis puts a ceiling on export demand.

Home prices in 52 of 70 major cities declined in December from November, according to government data. Contract sales, or sales booked before apartments are completed, dropped 30% in December at China Vanke Co., as the country’s biggest developer by market value offered fewer homes from November.

The central bank said that it will continue to implement “differentiated” housing-loan policies. Down payment ratios and mortgage rates vary for first and multiple home buyers and local authorities have a range of restrictions, including based on whether buyers are local residents.