An eye-catching property ad along a street in Nanjing which reads "Do you want?" At the end of August, liabilities exceeded 90 percent of assets at more than 160 developers that have borrowed at least 50 million yuan each from banks, sources said.

China's banking regulator plans to review debt levels at some real estate developers on concern the companies' borrowings are fueling excessive gains in property prices, a person familiar with the matter said.

China Banking Regulatory Commission (CBRC) wants to reduce leverage at developers that bought land at inflated prices and at large State-owned companies that have entered the property market, the person said, declining to be identified because the plans haven't been made public.

Some developers have borrowed too much, threatening to cause an increase in delinquent debts should property prices collapse, the person said. China's home prices rose at the fastest pace in a year in September as government stimulus spending drove a recovery in the world's third-largest economy.

"Should lending be tightened, the impact on the property market would be huge," said Liu Xihui, a Shenzhen-based analyst at Ping An Securities Co. Restrictions on second mortgages imposed after June 30 "had a big impact" on demand both among property investors and people looking for new homes, he said.

New credits for home purchases more than doubled to 479.3 billion yuan in the period. A gauge tracking 24 real estate firms traded in Shanghai has climbed 120 percent this year, the best-performing group on the benchmark Shanghai Composite Index.

Some banks loosened mortgage down payment requirements this year to boost market share, and some paid commissions to developers and real estate agents for referring borrowers, the person said. Almost 10,000 mortgages defaulted in the first eight months of 2009, taking the total to 140,000 at the end of August, the person said.

The CBRC's Shanghai branch in July ordered lenders to obey rules on mortgages for second homes and step up scrutiny of approvals. On Oct 28, the regulator said it plans to tighten rules on personal loans to prevent them from being used for speculation.