Chinese home buyers visiting a housing fair in Yichang, Hubei province. Photo: AFP
Chinese home buyers visiting a housing fair in Yichang, Hubei province. Photo: AFP

Chinese regulators have told banks new home mortgage loans in November must be below those issued in October, Shanghai Securities Journal reported, as Beijing looks to curb rising leverage in the housing sector.

Mortgages accounted for 35% of loans in the first half of 2016, but analysts estimate that jumped to 71% in July and August as frantic buying kicked in thanks to rapidly rising prices.

China’s banking regulator previously asked lenders to step up risk management of property loans amid record gains in house prices that have raised concerns of price bubbles and ballooning debts.

China’s new home prices rose in September at the fastest rate on record, according to data published by the National Bureau of Statistics on October 21.

Outstanding mortgage loans to individuals rose 33.4% to 17.93 trillion yuan (US$2.65 trillion) from a year ago by the end of September, China’s central bank said on the same day.

Banks need to focus on controlling credit risks and replenish capital reserves in the face of potential challenges from an aging population, a contraction in credit and falling home prices, the Shanghai Securities Journal cited a source close to the regulator.

Second-tier city Hangzhou on Thursday implemented new rules for home buyers, including higher down payments for second homes and restrictions on non-residents from buying properties, the city government said on its official microblog late Wednesday.

Dozens of cities have implemented measures restricting home purchases over the last few months as price gains spread to more cities.

Hangzhou new home prices rose 28% year-on-year in September, according to official data.