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An increasing number of banks in Shanghai are freezing loans for purchases of third properties. And even when loans are being offered, requirements for approval are getting tougher.
In a bid to cool down the sizzling property market, the central government is rolling out curbing measures in cities with soaring property prices and limited land supply. Banks in these cities are allowed to suspend loans to applicants wanting to buy their third house.
In Shanghai, the Industrial and Commercial Bank of China ceased loans for third properties as of last Thursday. Agricultural Bank of China and Bank of Communications also suspended similar loans.
Bank clerk of AGbank said "Our bank has put a stop to loans for third property purchases, since August 6th."
At some banks, loans for third houses are still available. But banks have set higher requirements for issuing these loans.
Bank clerk of Everbright Bank said "We will review your career status, your employer. We're not considering self-employed entrepreneurs right now. But if you are a public servant, a teacher or business staff, you're more likely to get the loan."
Analysts say the purpose of the policy is mainly to crack down on speculation activities on the real estate market.
Han Jianjun, Department Manager of Huayan Ltd. said "For house buyers who are buying their third house, they must already have more than one house in which to live. So their third house must be being used for speculation."
Although getting loans for third houses is set to become much more difficult, some real estate agents say their business won't be affected. Because for those who are wealthy enough to purchase a third house, money usually isn't a problem.