September 14, Chinese lenders have been urged by the Chinese Banking Regulatory Commission to guard against risks in commercial real estate projects that have been targeted by speculative investment, according to an official newspaper.

Citing an unnamed source, the China Securities Journal reported on Tuesday that banks need to pay close attention to risks when lending to commercial projects and should introduce higher lending criteria for such loans than for residential mortgages.

Chinese banks are already prohibited from rolling over existing loans to commercial real estate projects.

Central government property measures, which range from home-buying restrictions and home price limits to curtailed lending to developers, have forced many real estate enterprises to shift their focus to commercial projects to maintain growth.

Those measures have also forced speculators to search for investment opportunities in lesser-developed cities that have not been included in the government’s existing curbs.

The new order also asked banks to monitor property market risks in second and third-tier cities where purchase restriction policies have not yet been imposed, the paper said.

Business China

Source:Business China