Shenzhen Banks Feel Pressure to Reign in Lending Amid Home Price Bubble

Shenzhen sales by area increased 65% in 2015 and prices rallied 46.8% according to the NBS. Lending also boomed. 91.2% of home buyers took out mortgages, and increase of 3.9 percentage points over 2014 and an all-time high. The average loan-to-value was 64.6%.

Bank credit isn't the only source of funding. Some real estate investors are using privately borrowed cash to fuel investment in the city, repeating the housing boom behavior that helped fuel real estate blow ups in numerous cities around China. As a result, banks are wary and starting to tighten credit standards.
Buyers should be aware that the current first-tier housing boom is completely reliant on easy credit, once the credit expansion slows slightly, the highly leveraged stampede will be quite terrible.

Shenzhen property market "abnormal prosperity" also makes banks feel the pressure, and they have begun to tighten.
Banks are raising credit standards on agents buying property, raising the down payment to 40%.
Many Shenzhen developers and industry insiders said that Shenzhen's rapid rise in house prices makes banks concerned, including in particular the "crowdfunded house flippers", and the great risk of short-term house flippers losing funding, banks have begun to prepare for this possible risk.
iFeng: 深圳楼市“另类繁荣”危机:银行感到压力开始收紧

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