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China Extends Financial Policies to Support Real Estate Market Stability

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At 11:50 on July 11th follow


Summary:
The People’s Bank of China and the State Administration of Financial Supervision issued a notice on the 10th to adjust the two previously announced financial policies to support the stable and healthy development of the real estate market, and extend the applicable period to December 31, 2024.

Xinhua News Agency, Beijing, July 10th: The central bank and other two departments extended two financial policies to provide continuous and stable support for real estate companies

Xinhua News Agency reporter Wu Yu

The People’s Bank of China and the State Administration of Financial Supervision issued a notice on the 10th to adjust the two previously announced financial policies to support the stable and healthy development of the real estate market, and extend the applicable period to December 31, 2024. The relevant person in charge of the People’s Bank of China stated that this move aims to guide financial institutions to continue to extend the stock financing of real estate companies and increase financial support for guaranteed delivery buildings.

In order to promote the stable and healthy development of the real estate market, the People’s Bank of China and the former China Banking and Insurance Regulatory Commission jointly launched 16 financial measures in November 2022, starting from maintaining the stability and order of real estate financing, actively providing financial services for guaranteed delivery of buildings, and cooperating with distressed real estate enterprises. In terms of risk management and increasing financial support for housing leasing, support policies have been clarified.

According to the relevant person in charge of the People’s Bank of China, after the “Sixteen Financial Measures” were issued and implemented, they played a positive role in maintaining reasonable and moderate real estate financing and promoting the resolution of real estate enterprise risks, and achieved good policy effects. “Considering the current real estate market situation comprehensively, in order to guide financial institutions to continue to extend the stock financing of real estate companies and increase financial support for guaranteed delivery buildings, the financial management department has extended the applicable period of relevant policies.”

The reporter found that the extension policy is concentrated in two aspects. On the one hand, it is a policy to support the reasonable extension of stock financing such as development loans and trust loans, and on the other hand, it is a policy to encourage financial institutions to provide supporting financing support for guaranteed delivery buildings.

Regarding the extension of existing financing, the original policy stipulates that “from the date of issuance of this notice, if it expires within the next six months, an extension of one year beyond the original regulations may be allowed.” After this policy adjustment, “those that expire before December 31, 2024 can be extended for one year beyond the original regulations.” The financing environment of the real estate industry. At the same time, this is also conducive to financial institutions to resolve the risk of existing loans.

In addition, the original policy stipulates that “within half a year from the date of issuance of this notice, the supporting financing issued to the special loan support project shall not be lowered during the loan period; If the newly issued matching financing is badly formed and the relevant institutions and personnel have done their due diligence, they may be exempted from liability.” After this adjustment, the applicable period is also extended to before December 31, 2024.

Industry insiders said that this extension will help dispel some of the concerns of financial institutions about the new supporting financing issued by real estate companies, provide a moderately loose financing environment for real estate companies, and help guide financial institutions to provide continuous and stable financial support for real estate companies.

In addition, the reporter also learned from the People’s Bank of China that the Guaranteed Building Loan Support Plan, which was due to expire on March 31, 2023, has been confirmed to continue its implementation.

Industry insiders said that since the beginning of this year, the financial management department has introduced a series of measures to address the financing problems of real estate companies, starting from stock and incremental growth, increasing financing support through multiple channels such as loans, bonds, and asset management, and maintaining high-quality financing cash flow for real estate companies. Stability will help guide the balance sheet of high-quality real estate companies to return to a safe range, and promote the smooth transition of the industry to a new development model.

The Monetary Policy Committee of the People’s Bank of China recently held a regular meeting in the second quarter of 2023, proposing that policies should be implemented to support rigid and improved housing demand, and do a solid job in ensuring housing delivery, people’s livelihood, and stability, so as to promote the stable and healthy development of the real estate market , Accelerate the improvement of the housing leasing financial policy system, and promote the establishment of a new model for the development of the real estate industry.

The relevant person in charge of the People’s Bank of China stated that all financial institutions should earnestly implement the requirements, implement policies according to the city to support rigid and improved housing needs, maintain reasonable and moderate real estate financing, increase financial support for guaranteed delivery buildings, and promote the marketization of industry risks. To promote the stable and healthy development of the real estate market.

Responsible editor: GDN007

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2023-07-11 03:50:00
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