Housing credit policy to be reformed
11/3/2003 14:22
China will try to restrict construction of high-end housing
projects, avoid property market manipulation and lower credit risks this year,
eastday.com reported today.
The People's Bank of China, the nation's
central bank, is currently drawing up policies under which the down payment on
high-priced properties is likely to be fixed at 50 percent of the total price
rather than 20 percent, said a spokesman with the central bank.
Following
some Hong Kong banks, the central bank will ask property developers receiving
bank loans to mortgage existing projects in order to reduce credit risks for
banks.
The central bank checked the housing credit businesses of
commercial banks nationwide and found 9.8 percent were granting improper loans,
involving 24.9 percent of the total loan volume.
Some banks extended
loans to property developers that had self-injected capital under 30 percent of
total investment and reduced down payments for home buyers, conditions likely to
increase credit risks and create more bubbles in the domestic real estate
market, said an industry analyst.
Wendy Zhang/ Shanghai Daily news
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