China will strive to clean up irregularities in property market in 3 years

BEIJING, July 23 (Reuters) - China will strive to clean up irregularities in the property market in three years, the housing ministry said on Friday, as Beijing keeps up pressure on the red-hot market by tackling unbridled borrowing.

The regulators will launch a probe into new construction by property developers, the use of illegal funds for mortgages and the deduction of rental deposits, said a notice jointly issued by eight government agencies, including China’s state planner and the market regulator.

Vice Premier Han Zheng on Thursday reiterated the Chinese government’s current stance that “housing is for living in, not for speculation”.

China’s property market has rebounded quickly from the COVID-19 crisis, which has fuelled concerns about financial risks in an overheated market. Late last year, authorities began stepping up curbs on the sector, including issuing regulations to restrict funding to property developers.

China aims to improve its supervision of the sector and to curb irregular activity within three years, according to the notice.

The authorities will work together to crack down on irregularities. For example, the state planner will collect information on illegal activities and financial regulators will look into illegal flows of funds into the market, the notice said.

Government measures to cool the housing market has put the brakes on growth. Growth in the price of new homes has slowed for the first time since November last year in month-on-month terms and property investment is at its weakest pace this year. (Reporting by Liangping Gao, Stella Qiu and Ryan Woo; Editing by Louise Heavens)