China to Review Debts of Real-Estate Developers

Addressing concerns that the borrowings of real-estate companies are fueling excessive gains in property prices, China's banking regulator aims to review debt levels of some developers, says Bloomberg.

 

An unnamed source familiar with the matter tells Bloomberg that excessive borrowing by some developers threatens to cause an increase in delinquent debts should prices collapse.

 

According to Bloomberg, China’s home prices rose at the fastest pace in a year in September as government stimulus spending drove a recovery.

 

“Should lending be tightened, the impact on the property market would be huge,” Liu Xihui, a Shenzhen-based analyst at Ping An Securities Co., tells Bloomberg. Xihui says that restrictions on second mortgages imposed after June 30 “had a big impact” on demand both among property investors and potential homeowners.
 

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