Authorities have tightened credit controls on the purchase of second properties, raising the down payment to 40 percent from 30 percent to drive out speculative purchasing.

Mortgage applicants who have already bought property on mortgage and seek another loan for second and other real estate must now pay at least 40 percent with an interest rate at least 10 percent above the benchmark rate, the People's Bank of China and the China Banking Regulatory Commission said. They issued a joint statement early this morning.

For those seeking mortgages to purchase third, fourth and other properties, the down payment requirements and interest rates will be higher, with commercial banks determining their specific requirements, the top banking authorities said.

In July Citibank launched its home refinancing program in Shanghai to target home buyers who need refinancing because of rising property prices in the city. It is the first offering of its kind by an overseas bank in China.

New individual mortgages in Shanghai posted a monthly record in August, the highest since 2005, and the central bank cautioned commercial banks about risks.

In August, individual mortgages increased by 7.13 billion yuan (US$946 million) at domestic banks in Shanghai, up 1.26 billion yuan over July in the booming property market, the Shanghai headquarters of the central bank said earlier this month.

(Shanghai Daily September 28, 2007)