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Daniel Ren

Shanghai has told commercial banks to cut mortgage ties with six big real estate brokers for a month as it tries to pour administrative cold water on the red-hot ­property market.
But observers said the move was unlikely to stop price rises given land shortages appeared to be pushing up the market.
The city government said on Saturday that the local banking regulator had slapped a ­one-month ban on six property brokers applying for mortgages on behalf of their clients. The brokers are Lianjia, Pacific Rehouse, 5i5j, Jiaxin Real Estate, Hanyu Property and Renfeng Real Estate.
The statement said the brokers illegally secured bank funds, misusing them for mortgage down payments.
Homebuyers are supposed to provide down payments, which cannot be in the form of loans.
The ban was aimed at “regulating mortgage businesses, warding off credit risks and maintaining healthy, stable development of the local property market”, the statement said.
It comes a month after the municipality rolled out a fresh round of measures to rein in home prices, which have risen by at least half in the past 10 months.
Shanghai property market beset by ‘panic buying’ on the back of favourable policies
In that round, Shanghai increased down payments, raised the threshold for home purchases by non-residents and tightened oversight on financing through the shadow banking system.
The brokers committed wrongdoings before the new policies were announced in late March, the statement said.
It’s a clear message from the city government that homebuyers should at least temporarily hold off on home purchases
Shanghai resident Feng Tao
Shanghai resident Feng Tao said the ban could affect his plans to buy a new flat.
“It’s a clear message from the city government that homebuyers should at least temporarily hold off on home purchases,” Feng said.
“The administrative measures could help drag down prices in the coming few months.”
In Shanghai, homebuyers usually enlist brokers to help apply for mortgages and the six punished brokers account for the bulk of these transactions.
The city government requires homebuyers and sellers to go through brokers to ensure the transactions are legal. Without proper paperwork from the ­brokers, changes in ownership cannot be registered with the municipal authorities.
For Shanghai property, time is money
The one-month ban will force buyers and sellers to sign new agreements with other brokers to complete sales in the period.
The measures are designed to curb demand from buyers but ­industry insiders said housing supply needed to be expanded.
“It’s advisable to increase land supply for construction of residential property to solve the ­problem,” said Ouyang Jie, a vice-president at property developer ­Future Holdings.
“Otherwise, Shanghai’s property prices will regain upward ­momentum in the second half of this year.”


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Property policies

Shanghai hits real estate brokers with month-long mortgage ban

Property prices in Shanghai have risen by at least half in the past 10 months, prompting city authorities to introduce various measures to curb demand. Photo: Bloomberg

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Move aimed at tackling demand but authorities should expand land supply, insider says


Shanghai hits real estate brokers with month-long mortgage ban

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Move aimed at tackling demand but authorities should expand land supply, insider says

Move aimed at tackling demand but authorities should expand land supply, insider says