CBRC curbs home loans

The China Banking and Regulatory Commission (CBRC) announced Thursday that it will strictly enforce previously relaxed restrictions on secondary home purchases, the South China Morning Post reported. While a rule passed two years ago requires purchasers of second homes to put up a down payment of 40% of the property’s sale value, in practice local governments reduced the ratio to 30%. Combined with the economic stimulus package, the result has been a surge of homebuyers returning to the market, prompting fears of a new property bubble. However, following the official announcement, and communications from Beijing to local bank branches, local banks have already begun to resume application of the 40% standard, causing a decline in transactions in some markets.