SHANGHAI, China - A housing-market meltdown may be wracking the U.S. economy and shaking the financial markets, but in Asia, the question is how to cool things down.

From China and South Korea to India and Singapore, housing prices are soaring amid strong economic growth and surging demand from developers and upwardly mobile families who want to upgrade their homes.

Of all Asia's markets, China's is the hottest - although the boom is creating problems there, too. Housing inflation is pricing some people out of the market, and authorities worried about excessive development are raising interest rates and taking other steps to curb lending.

Experts also warn that many mortgages are risky and suggest the country could face a property crisis of its own someday.

For now, demand is being driven by people like Li Ruoning, a single, 22-year-old public relations company employee in Shanghai - just one of millions across Asia whose hearts are set on fulfilling the dream of owning their own home.

She borrowed about US$40,000 from her parents in central China for the down payment on a small apartment just five minutes from her job.

What's more, Li says she would buy another apartment as an investment, if she had the money.

"I'm pretty sure that housing prices will not drop, especially with the best locations," she said.

Many Chinese families are already deep into speculating on property, a main driver of the surging prices that have Chinese authorities worried a bubble may be forming. New apartments north of Shanghai's famous Bund waterfront are selling for a record $17,000 per square meter.

Yi Xianrong, a prominent economist at the China Academy of Social Sciences, a government think tank, is one of those sounding the alarm.

He contends that China's housing loans are riskier than those in the U.S. because most loan applicants give false information about their assets and income.

Since China lacks a comprehensive credit data system, borrowers often manage to qualify for loans using false information, Yi says. He believes the overall quality of property loans in China may be even worse than the risky mortgages that are causing so much trouble in the U.S.

"I estimate that the large majority of mortgage holders would not meet the standards for even subprime loans," Yi said in an interview with the state-run magazine Oriental Outlook.

A collapse of China's property market would reverberate throughout the world financial system - although few experts believe it would happen anytime soon.

The lack of reliable credit information obscures the level of risk, especially in China.

"It's hard to tell what the total exposure to real estate lending is. It's very difficult to judge until you have a price correction," said Nick Lardy of the Peterson Institute, a Washington think tank.

Still, given the enormous demand for new housing across the region, a sudden correction in Asian property markets appears unlikely.

In India, where housing prices have been rising 30 per cent to 40 per cent annually the last couple years and have remained firm so far this year, experts see fewer risks.

Families tend to rely more on personal resources and banks have been steadily raising interest rates and cutting back on lending, which is modestly restraining development. A newly introduced credit score system is expected to help banks do a better job of managing risks.

"The Reserve Bank of India has been keeping a tight lid on banks' exposure to real estate," said Ritesh Maheswari, a credit analyst with Standard & Poor's in Singapore. "We don't foresee large-scale defaults."

Hong Kong is still regaining ground lost during the Asian financial crisis of the late 1990s and provisional government statistics show steady growth through September. Singapore's high-tech boom helped boost private home prices by 8.3 per cent in the second quarter from the first, the second-fastest pace on record.

In both cities, the talk is of how to cool, not revive the market.

Meanwhile, property prices in Japan have just begun to rebound after 16 years of declines amid a surge in buying by investment funds, according to the Ministry of Land Infrastructure and Transport. Recently, though, housing investment has fallen amid a tightening of building standards.

Across much of Asia, property lending differs markedly from that in the U.S. Lending standards vary from country to country, but in many markets including China, lenders tend to demand down payments of at least 30 per cent and often much higher.

The big down payments mean "there's still quite a big cushion" against losses, said Sam Crispin, founder of Shanghai-based real estate firm Crispin Property Consultants.

In Hong Kong and Singapore, government support through low-cost rentals or low-interest home loans to poor families helps to minimize the risk of foreclosures. In South Korea, an earlier crackdown on risky mortgages has reduced the risks.

In China, the residential market may be sounder than the commercial property market. The frenzied construction of shopping malls and office towers has authorities worried over the potential for a debt crisis if the new projects fail to attract buyers and developers default on bank loans.

So far, Beijing's efforts to rein in soaring prices and investment have had little impact: Housing price inflation in China hit a new monthly high of 9.5 per cent in October, with prices in Beijing rising by nearly 18 per cent.

"I found prices rose too fast and I didn't know why," said Sun Chunming, a technician at an online gaming company in Shanghai who bought an apartment in August. "But I was worried if I didn't buy it now, I might not be able to afford one later."

The biggest property lender, China Construction Bank, recently issued a report warning that China's banks are entering a high-risk period for personal housing loans.

The report urged banks to beware of falsified credit data and to tighten loan terms for families buying more than one property. The central bank recently raised down payment requirements for second mortgages to 40 per cent, but analysts say more needs to be done to rein in the market - without triggering a collapse.

Chinese Premier Wen Jiabao warned earlier this month that the government needs to tighten controls to keep real estate speculation from "causing market disorder."

"The government does need to do something fundamental to improve the situation. Tightening mortgage operations is crucial for avoiding a financial crisis," said Zhang Yu, a real estate analyst from Guotai Jun'an Securities.

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