Shanghai's banking regulator yesterday emphasized the importance of the 40 percent down-payment rule for second homes in a bid to prevent real estate speculation.
Also over the weekend, the Shanghai Housing Guarantee and Administration Bureau said it has ordered real estate developers to register their sales plans with the local industry watchdog to prevent them holding the properties for higher profits.
Banks in Shanghai must strictly comply with the down-payment requirement on second homes, the Shanghai Bureau of the China Banking Regulatory Commission said.
"Banks are banned from bypassing the rules under the excuse that they can't get clients' credit records due to lack of access to the central bank's individual credit database," the local banking regulator said.
The regulator also highlighted irregular practices such as banks claiming credit records couldn't be obtained because it was hard to investigate applicants' property deals outside Shanghai.
Banks also can't use their own definition of what constitutes a second home, the regulator said.
In 2007, the authorities asked banks to take at least 40-percent down payment with an interest rate at least 10 percent higher than the benchmark rate on second homes to drive out speculation in the then red-hot real estate market.
