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The
new regulation applies to indirect and direct investment in
residential projects in 16 major cities where house prices have
soared, according to three executives of securities firms who
have seen a document from the state-sponsored Asset Management
Association of China (AMAC).
The number of cities may be modified and expanded based on
recommendations by the housing ministry, the document said.
Existing investment by private equity investment funds in
residential property is not affected by the regulation.
AMAC, the self-regulatory body that oversees private funds,
stipulated that funds raised through asset management plans by
brokerages must not be lent to developers to replenish cash flow
and purchase land, or to illegally fund downpayments for all
institutions, via entrusted loans or other means.
The industry watchdog said that the majority of such investment
by brokerages in property came from banks and was concentrated
in only a few hot markets.
AMAC was not immediately reachable for comment.
China's banking regulator have previously asked lenders to step
up risk management of property loans amid sharp rises in house
prices that have spurred concern about price bubbles and
ballooning debts.
The largest Chinese cities have taken different measures to try
to cool their housing markets.
Shenzhen and Shanghai have tightened rules for listed real
estate firms seeking to issue bonds, in efforts to curb
excessive capital flowing into the property market.
(Reporting by China Newsroom; Writing by Yawen Chen; Editing by
Richard Borsuk)
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