Bank curbs loans for luxury homes

China Construction Bank, the country's top property lender, has imposed curbs on lending to
developers of luxury homes, hotels and offices, Reuters reported. The bank said that the
move was prompted by concerns for the higher risks associated with such projects. Its
priority is to develop affordable housing for ordinary people. The bank has increased the
loan interest rates for luxury properties and imposed a requirement that the developer finds
at least 40 per cent of the total investment in the project. The bank is also to ban developers
of theme parks and tourist spots from using their loans to devel-op properties and curb
lending to individuals to open karaoke bars and dancing clubs.
In April China's largest
bank, the Indus trial and Commercial Bank of China, said it would restrict lending for high-
grade office blocks and hotels and ban working capital loans to property developers.
Government policy is to increase the number of low-cost to meet demand from ordinary
families, while preventing a possible bubble in the high-end property market.