HONG KONG - China's property prices may fall in the next 12 to 18 months as banks curb loans to real estate companies, which could slow development, Hong Kong billionaire developer Vincent Lo said.

The government is pushing banks to hold back lending to property firms as it attempts to cool the housing market, said Lo, chairman of Shui On Land Ltd. The Shanghai-based developer received a Chinese bank's approval for a loan, which was withdrawn as the lender had a policy change, he said.

"We believe maybe the market is going to go through a tough time for another 12 to 18 months, and then I think it's a good time to go and buy something" when prices are lower, said Lo, who's known as "Mister Shanghai" after transforming century-old homes into a pub and entertainment project in the city's Xintiandi district.

China has expanded its property control measures this year, raising downpayment requirements and mortgage rates to ease gains in home prices. The government said in July it will rein in prices in smaller cities after limiting home purchases in markets such as Beijing and Shanghai.

The developer has found a foreign bank for the loan for one of its projects in China, Lo said, declining to identify the development or the bank. Such cancellations are "happening quite frequently" to other real estate developers in the country, he added, referring to the Chinese lender that withdrew the loan it had approved for the company.

"For local developers, I think they would be going through a tough time right now," Lo said. "That would bring the price down."

Chinese regulators have told banks to tighten lending for real estate on concern credit risks will increase as the effect of government curbs deepens in the next three to five months, a person familiar with the matter said last month.

The property tycoon said he remains bullish on China's residential and commercial property markets in the long term, as more people move into cities, creating demand for homes, shops and office buildings. "Right now, commercial property, if it is in a good location, good design, it will do very well," Lo said.

Shui On said in June it will spend about 8 billion yuan ($1.26 billion) to develop an office and restaurant precinct under its Xintiandi brand near Shanghai's smaller airport and high-speed rail station.

Xintiandi is a residential and commercial complex of local and international retailers and restaurants, including Paulaner Brauhaus and Starbucks Corp.

Shui On is set to earn as much this year as it did last, Lo said. "We're still confident that we will deliver results that will be comparable to last year," he said.

The company's first-half earnings fell 50 percent compared with the year-ago period after it completed fewer properties. In the next two years, it plans to sell more, Lo said.

Shui On plans to spin off its Chinese property leasing business next year in an initial public offering in Hong Kong, said Lo, who's ranked the 19th-richest person in the city by Forbes magazine, with an estimated net worth of $2.15 billion.