China’s banking regulator ordered lenders to take more care when making real-estate loans, widening efforts to prevent property speculators from causing asset bubbles and bad debt.

Banks should not lend to developers found by state agencies to have held land without building houses, the government said in a statement posted online late on 26 March. They should also stop approving new lines of credit to 78 government-controlled companies whose core business isn’t property development if they use collateral other than construction projects already in progress, according to the statement.

China’s property prices rose 10.7% last month, the fastest pace in almost two years, fueling concern that record lending and inflows of capital from abroad are creating asset bubbles in the world’s third-biggest economy.

bloomberg.com, Wall Street Journal