[photopress:real_estate_buyers.jpg,full,alignright]China’s banking regulator has just released a new circular, requiring banks to strengthen their management on commercial real estate credit. This comes with a rise in the number of house buyers who can’t afford their mortgages.
All of this, in a sense, in response to the American sub-prime disaster where greedy bankers loaned money to people who would, in other countries, not even get a credit card.
The China Banking Regulatory Commission sent an inspection team to Shanghai a month ago.
The team discovered some real estate companies had forged documents to help non-credit worthy customers get mortgage loans.
This is going to get those real estate companies into serious trouble unless they have amazing luck and connections.
The CBRC is calling on all banks to step up risk control, and carefully revalue the credit of both the real estate developers and home buyers to avoid further defaults. All of which means it will be harder to borrow money to buy a property and, as a result, property prices may stall or even, wonder of wonders, decline.
Source: CCTV.com
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