To rein in rapidly rising home prices in China’s biggest cities, the mainland’s top policymakers have unveiled new measures that show their determination to stabilise the market. The central bank was working with the housing ministry and banking regulator to review the lending activities of mainland developers and property agencies and crack down on non-banking finance institutions without licences, People’s Bank of China deputy governor Pan Gongsheng told a meeting of Chinese People’s Political Consultative Conference delegates in Beijing on Wednesday. “Developers and agencies taking part in margin lending, together with the media hype, have raised market expectations [of home prices], ” Pan said, while adding that supply and demand imbalances were still the fundamental reason for price increases. From the supply side, Lands Minister Jiang Daming said on Wednesday that the supply of land would be increased appropriately in cities where prices were rising quickly. His ministry would give “fully support” to local governments in Shanghai, Beijing and Shenzhen for their tightening measures, he said. “Housing prices will be stabilised,” Jiang said. As leverage risks increase in the housing markets in China’s first-tier cities, Shenzhen is taking the first steps to scrutinise and regulate local margin financing. The city government said in an urgent notice on March 4 the housing market was overheated and local internet finance and microfinance operations would have to submit the latest data on their margin finance to Shenzhen homebuyers by Wednesday. That included loans to cover down payments, crowdfunding and other highly leveraged financing products, the mainland’s Securities Times reported on Tuesday. “We will further study the finance risks of leveraged loans among new financial institutions,” the government said. By Tuesday, leading mainland property agencies include Lianjia and 5i5j had stopped offering down-payment-related financing products, Securities Times said. Led by Shenzhen and Shanghai, Chinese biggest cities have seen home prices skyrocket recently despite the implementation of strict home buying restrictions, including a 30 per cent down payment requirement for a first home. Market watchers say prices were pushed up by high interest rate down payment lending from non-bank channels. Existing down payment loans in Shenzhen totalled about 2 billion yuan, mainland media reported. The government-run Xinhua news agency warned last week that speculative practices had flooded the market in Shenzhen and suggested financial institutions tighten up on credit. Mainland regulators are imposing new rules intended to stamp out margin lending activities. The rules will bar lenders including developers, housing agencies, small-loan firms and peer-to-peer networks from offering loans for down payments, Bloomberg reported. Regulators including the central bank and the China Banking Regulatory Commission will also ask commercial banks to scrutinise mortgage applications and reject those where down payments come from loans offered by such institutions, it said. While down payment loans are not a fresh product in the mainland housing market, they have been widely used by home buyers in the past few years. However, their rapid growth in the past year has sparked concerns. Shenzhen’s average mortgage ratio was 65 per cent in December, which Bocom International chief China strategist Hong Hao said was still low compared to the level in Western countries. Xie Haoyu, a research analyst at Huatai Securities, said down payment loans were “the accelerator, but not the key reason for home prices advancing”, which was excess liquidity. To support the weakened property sector, the People’s Bank of China has cut interest rates six times and banks’ reserve requirements several times since November 2014.