(Bloomberg) -- China's government is stepping up efforts to contain runaway property prices, with the central bank clamping down further on mortgage lending in areas deemed overheated, people with knowledge of the matter said.
Some lenders in those cities have been asked to suspend distributing new home loans, said the people, who asked not to be named as the change hasn't been made public. Central bank branches in the cities communicated verbally with lenders within their jurisdictions, said the people, who didn't identify the affected cities or say how long the mortgage limits will last.
Banks in Shanghai were told not to increase mortgage lending from the previous month, another person with knowledge of the matter said. The central bank didn't respond to questions sent Monday via fax.
The latest mortgage limits come amid signs that China's central government is intensifying curbs to rein in excessive home prices, after relying on local authorities to tighten rules in some two dozen cities since late September. Shanghai, which already imposed restrictions earlier this year, said in a Weibo post on Monday that it will tighten mortgage loan policies starting Nov. 29, while Tianjin has raised minimum mortgage down payments for first homes to at least 30 percent.
The banking regulator earlier this month told lenders in 16 cities to conduct checks on their mortgage lending, including in first-tier hubs like Beijing and Shenzhen. Trust firms were also told to review any business related to home lending.
A wave of Chinese cities from trading centers to regional hubs had their largest price surge in history this year. Even after tightened purchase restrictions, Anhui provincial capital Hefei saw average new-home values rallying 48 percent in October from a year earlier, while prices jumped 31 percent and 32 percent in financial hubs Shanghai and Shenzhen. Local authorities have introduced home-market curbs ranging from raising down-payment requirements for both first and second homes, to ruling some potential buyers ineligible.
To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net, Heng Xie in Beijing at hxie34@bloomberg.net, Jun Luo in Shanghai at jluo6@bloomberg.net, Emma Dong in Shanghai at edong10@bloomberg.net. To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Jessica Zhou at jzhou75@bloomberg.net, Philip Lagerkranser
With assistance from Heng Xie, Jun Luo, Emma Dong, Steven Yang
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