By Lusha Zhang and Ryan Woo

BEIJING (Reuters) – China is tapping the brakes on property prices and cutting the availability of mortgage loans to spur households to spend instead of repaying debt, as policymakers try to ignite private consumption and stimulate the pandemic-stricken economy.

China’s household leverage ratio had soared to a record by the end of June, prodded by a jump in mortgages as the government allowed real estate to support the economy.

Indeed, the mortgage burden for Chinese households has grown so huge that it hobbles private consumption, analysts say, and residential incomes plunged into negative territory this year.

Since August, policymakers have tried to stimulate spending under a so-called “dual circulation” strategy President Xi Jinping espoused this year, analysts say.

But balancing consumption with the property market could be tricky to pull off. A precipitous fall in property prices would crush consumer sentiment, the opposite of