Property Loans Dry Up in Chinese Cities

Banks in China have stopped accepting loan applications for property in the country's second- and third-tier cities in an effort to curb inflation.
July 26, 2011, 1pm PDT | Nate Berg
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As a result, upfront costs and downpayments for houses have skyrocketed.

"'You'd better prepare to pay 40 percent of your home price as down payment, because commercial banks are going to ask more for a property loan,' said Gong Hang, a bank staff in Taiyuan, Shanxi province. 'It is only a matter of time,' he said.

Requirements for second-home loans have also become stricter in these cities. Home buyers may have to pay 50 to 60 percent of their home prices as down payments, with lending interest rates 10 to 15 percent higher than the benchmark rate, the paper said."

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Published on Thursday, July 14, 2011 in China Daily
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