Nanjing banks tighten mortgage loans

The cash squeeze in the interbank system is rippling out across the residential property market, as many commercial banks in Nanjing have called a stop to giving mortgage loans for properties that were occupied and have been put up for sale.

A number of Nanjing banks have suspended accepting mortgage loan applications for pre-owned apartments, the National Business Daily reported on Wednesday.

The application process for eligible first-time homebuyers has been extended to more than one month from a week, implying commercial banks are tightening credit, a realty expert said.

Commercial banks started to strengthen their risk control after the credit crunch in June, which lead to the prolonged mortgage application process, according to another real estate analyst, Chen Sheng.

Sellers on the secondary market may have to lower their asking prices, added Chen.