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May 31, 2016

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Suspension on banks, realtors over

THE Shanghai Office of the China Banking Regulatory Commission has allowed business between commercial banks and six real estate agencies to resume after a one-month suspension in an effort to normalize the property market.

An internal notice seen by Shanghai Daily said the banks can now conduct mortgage business with the housing agencies as well as online registration of home purchase contracts. The Information Office of the Shanghai Municipal Government confirmed the notice through its official Weibo account.

The suspension sought to clamp down gray-market mortgages, the Shanghai Office of the China Banking Regulatory Commission said in its previous announcement.

Market insiders said the regulator was lifting the suspension because it might be able to trace back sources of gray business including providing home buyers with downpayment loans and bridging loans that bypass the banking system.

This type of behavior was believed to bring systematic risks to lenders.

The local branches of Beijing Homelink Real Estate Brokerage Co, Pacific Rehouse Co and Shanghai Hanyu Property Brokerage Co were affected by the one-month suspension.

“During the suspension, Homelink stopped its downpayment loan business while other real estate agencies also rectified their conduct on false advertising and information concealment,” the Shanghai Banking Association said in a statement yesterday.

“Once illegal behavior surfaces again, commercial banks have an obligation to halt cooperating with those agencies,” it said.

In a separate statement issued yesterday, the Shanghai Association of Realtors made a commitment to exit loan businesses that they are not licensed for, and promised not to file false purchase notices to drive up housing prices.

The suspension on March 25 was part of efforts to curb rising property prices in Shanghai.


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