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China is tightening controls on mortgage lending for third home purchases, in a bid to cool down the property market.
Major cities including Beijing, Shanghai and Hangzhou have already frozen new mortgages for applicants wanting to buy their third property. Now Guangzhou is following suit. Local branches of China CITIC Bank and China Merchants Bank initially continued to issue mortgages for third properties despite the government's control measures. But since August 9th, branches in Guangzhou have either stopped offering these mortgages altogether, or at least tightened the lending requirements.
Guangzhou's property prices haven't reached as high as those in Beijing and Shanghai, so the banking regulator hasn't forced local lenders to freeze mortgage lending. Analysts say the tight measures could crack down on speculation and help the real estate market develop stability.
Han Shitong, Analyst said "The measure can curb speculative property purchase, especially those investors who make use of preferential lending policies to speculate."