China’s housing ministry and financial regulator asked local governments to better coordinate with financial institutions to provide financing support to real estate projects, as policymakers work to revive the sluggish housing market.
The two regulators announced a plan to set up a mechanism aimed at responding to the financing needs of real estate projects more precisely, supporting the stable development of the housing sector, the regulators said in a joint statement on Friday.
China’s property sector has been grappling with a liquidity crisis since mid-2021, with major developers defaulting on or delaying debt payments as they struggle to sell apartments and raise funds, weighing on the growth of the world’s second-biggest economy.
The Ministry of Housing and Urban-Rural Development and the National Financial Regulatory Administration asked local governments to produce lists of real estate projects that are eligible for financing assistance, according to the statement.
Financial institutions should speed up loan approval for projects that have sufficient collateral, reasonable liabilities and guaranteed repayment sources, the regulators said.
They said that financial institutions should prevent the hasty withdrawal, suspension or withholding of loans from projects that are experiencing temporary difficulties but maintaining a basic balance of funds.
In addition, they said that extending existing loans, adjusting loan repayment arrangements and offering new loans for projects would be supported.
Source: Finance Yahoo