A 20% rebound in average property prices in Hong Kong since the beginning of the year has triggered concerns a price bubble may be forming, and similar alarm bells have begun ringing on the mainland, where regulators have started expressing concerns that prices are rising too fast.

The China Banking Regulatory Commission said last week it would act to enforce credit control policies on second-home buyers, who were required to make a down payment of 40% before being eligible to raise a loan for the balance of the purchase price.

Such borrowers should be charged interest at a 10% premium to benchmark rates, but lenders have recently become lax in enforcing loan limits and mortgage rates.

South China Morning Post