THE Shenzhen Branch of China Construction Bank has begun adopting the official reference prices for pre-owned housing transactions as basis for bank mortgage loans starting from Tuesday, Shenzhen Special Zone Daily reported.

On Feb. 8, the Shenzhen Municipal Housing and Construction Bureau unveiled a list of reference prices at below market rates for 3,595 residential estates in the city, potentially squeezing mortgage loan valuations and cracking down on arbitrary price markups.

A notice was also issued that day stating that the reference prices were based on the registered transaction prices of pre-owned homes and prices of new apartments nearby.

The bureau will release an official reference price list for pre-owned housing transactions on a regular basis.

The Shenzhen Branch of Agricultural Bank of China said it is mulling specific rules on issuing mortgage loans with reference to the price list issued by the city’s housing authorities.

Earlier, the Shenzhen Branch of China Everbright Bank also issued a notice, saying that it will take the reference prices for pre-owned homes as a guide for issuing mortgage loans.

A number of real estate agents told the Daily that though banks have not yet announced specific rules on issuing loans, it is inevitable for them to adopt the reference prices set by the government as the basis for vetting mortgage loan applications.

According to the latest data released by the official website of Shenzhen Real Estate Intermediary Association, a total of 362 pre-owned homes were sold in Shenzhen from

Feb. 15 to 21, down 78.3 percent on a monthly basis.

(Zhang Yu)