Shanghai Daily news

The Shanghai branch of the nation's banking regulator yesterday urged local lenders to ward off risks in the housing loan sector.
The China Banking Regulatory Commission's Shanghai Bureau said it has asked local mortgage loan providers to continue to strengthen their risk control in the soaring home loan segment.
"Local commercial banks should further fortify their credit risk management capabilities to achieve a healthy development in the housing loan sector," said the CBRC in a statement.
It is the second warning from a local financial regulator on risks in the housing loan sector in the past two months.
On January 26, the People's Bank of China's Shanghai Branch warned local commercial banks of risks that may be transferred from the booming property market to the banking industry.
Shanghai's commercial banks extended housing loans worth 102.3 billion yuan (US$12.33 billion) in 2004, up 20.4 billion yuan from a year earlier. The outstanding value of individual housing loans rose 72.8 billion yuan in the city last year.
The regulators' repeated warnings about credit risks in the real estate industry have already prompted the banks to impose stricter requirements on housing loan applicants, especially for second-hand home purchases.
For homes built between 1984 and 1989 in Shanghai, Bank of China grants housing loans up to 40 percent of the property's value, compared with 80 percent for those built since 1999, according to Anjia Group, a leading mortgage financial services provider in Shanghai.
At present, Bank of Shanghai provides mortgage loans only to buyers of second-hand homes whose value is more than 600,000 yuan.
The average nonperforming loan ratio on mortgage loans to new home buyers is only around 0.03 percent in Shanghai.
However, the NPL ratio in the second-hand housing segment is more than 70 percent of all bad loans in the individual mortgage loan sector in the local branches of the big four state-owned banks, said industry officials.
Shanghai has adopted a series of measures to slow the rise in housing prices since the beginning of this year.
The Shanghai government imposed a 5.5 percent tax, effective from last Sunday, on residents who sell their residential properties within the first year after purchase.
Eight Shanghai-based land developers have been punished by the city's housing and land bureau recently for artificially raising the prices of their projects.