Photographer: Jerome Favre/Bloomberg
China Cracks Down on Developers Financing Home Buys, Xinhua SaysBloomberg News
Officials also want to stop consumer loans flowing to property
Developers tumbled last week on news of down-payment checks
China will “strictly” ban property developers and real estate agencies from financing down-payments for home purchases, the state-run Xinhua News Agency reported, citing the housing ministry.
The report on Friday also said the government will step up anti-money laundering efforts in the real estate industry and stop individuals misusing consumer loans for home purchases.
Banks should manage mortgages and consumer loans separately, and closely monitor borrowing through credit cards, the report said. It also warned against Internet finance companies and microlenders illegally providing financing.
Developers tumbled a week ago when Caixin reported that officials had stepped up checks connected to down-payment loans. Investors are weighing developers’ prospects after stratospheric share price gains this year, with China Evergrande Group up 505 percent and Sunac China Holdings Ltd. gaining 475 percent. The industry is consolidating and the government is trying to rein in home prices.
— With assistance by Jun Luo