Amid a continuous effort to lift purchase restrictions, there is a gloomy outlook on China's real estate industry as some cities see residential mortgage loan defaults, 21st Century Business Herald reported on Thursday.

During the months of May and June, some homeowners in Hangzhou of Zhejiang province, Ningde of Fujian province and Xinqi and Wuxi of Jiangsu province, were sued by banks for defaulting on residential mortgage loans, said the report.

In these cases, most of the homeowners claimed that they were unable to repay their loans.

Currently there is no data indicating that foreclosures have become a common phenomenon nationwide, but officials have warned the risks of default.

During a closed-door meeting in May, Liu Shiyu, the vice-governor of China's central bank, urged banks to expedite mortgage approvals for qualified homebuyers.

Shang Fulin, chairman of the China Banking Regulatory Commission, was quoted by the report saying there were defaults by developers and homeowners in some cities and some medium- and small-sized developers were facing strains in capital chains.

Shang also warns credit risks in third and fourth-tier cities, according to the report.

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