Xu is not alone.

It is hard for local home buyers to get mortgage loans covering 80 percent of the purchase price, as local banks have raised their housing loan requirements, said an industry analyst.

Banks, however, take a slightly different perspective.

"We are not raising loan requirements, but are conducting stricter examinations of home buyers," according to several local banks.

Banks are more willing to extend loans to people buying high-end properties, according to several local banks.

Up to 88 percent of housing purchase prices in the first half of last year was covered by loans from banks, according to the Shanghai Branch of the People's Bank of China (PBOC).

The monthly increase of housing loans in January, February and March this year reached 5.87 billion yuan (US$700 million), 2.23 billion yuan and 4.4 billion yuan respectively, according to the local branch of the PBOC.

Growing risks in the real estate market are cited as a main reason the banks are raising loan requirements for home buyers, the analyst said.

Up to one-fourth of mortgage holders have failed to make a payment on time at least once, according to the Industrial and Commercial Bank of China.

(Shanghai Daily April 23, 2003)