China’s Ministry of Housing said on Thursday it would expand its “white list” of real estate projects and accelerate bank lending for these unfinished developments to 4 trillion yuan ($561.8 billion) by the end of the year.
China’s Housing and Urban-Rural Development Minister Nie Hong made the announcement at a press conference together with officials from the central bank, the Ministry of Finance, and the State Financial Supervisory Administration.
Loans totaling 2.23 trillion yuan have already been approved for whitelisted developers. This amount will nearly double to 4 trillion yuan by the end of 2024, according to a senior Financial Supervisory Authority official.
China’s “whitelist” initiative, launched in January, allows city governments to recommend housing projects to banks for faster financing. The aim was to ensure that unfinished housing projects could be completed and finally handed over to buyers.
Xiao Yuanqi, vice minister of the Ministry of Public Administration, said on Thursday that all commercial and residential projects will be subject to the “white list” projects. This move is expected to expand the scope of the list.
Xiao also stressed that banks should release funds “as soon as possible,” and said the loans could be released to developers in full rather than in installments, according to CNBC’s Chinese translation.
The press conference was the latest in a series of senior government policy announcements aimed at supporting the economy.
In late September, the Governor of the People’s Bank of China, Pan Gongsheng, announced a 50 basis point reduction in the reserve reserve ratio (RRR) that banks are required to keep on hand. He also lowered the minimum down payment for second home loans nationwide from 25% to 15%.
A few days later, at a top-level meeting chaired by Chinese President Xi Jinping, officials pledged to “stop the decline in the real estate market and promote a stable recovery.”
Some investors see the recent uptick in activity as a sign that the Chinese government is finally ready to take drastic steps to stimulate growth, and are hoping for further stimulus at the briefing. was. As Mr. Xiao spoke, China’s CSI300 real estate index fell more than 5%, a reversal from gains of about 8.7% over the past three trading sessions.
Over the weekend, Chinese Finance Ministry officials announced plans for local governments to increase the issuance of special bonds for land purchases and to use affordable housing subsidies not only for new construction but also for existing housing stock. He announced that he would approve.
Chinese real estate stocks soared on Monday on the news, with the Hang Seng Mainland Real Estate Index up more than 2%. Real estate also rose the most in mainland China’s CSI 300 index, rising nearly 5%.
HSMPI has fallen more than 80% since its peak in 2020. Nee told reporters at a press conference in May that developers “should either go out of business, go out of business or be laid off.”
More than 50 cities across China have introduced policies to boost the real estate market, state media reported, citing the Ministry of Housing.
Ahead of Golden Week, Guangzhou announced that it would lift all restrictions on home purchases. Meanwhile, governments in Beijing, Shanghai and Shenzhen have eased restrictions on home purchases for non-local buyers and lowered minimum down payment rates.
The measures come after China’s previous measures have led to little meaningful recovery. New house prices fell at the fastest pace in more than nine years in August, data from the Office for National Statistics showed.
New home sales fell 23.6% in the year to August, a slight improvement from the year-to-date decline of 24.3% in July. Average home prices fell a seasonally adjusted 6.8% month over month in August, according to Goldman Sachs.
The real estate sector, which once accounted for more than a quarter of China’s economy, has been in a painful slump since 2021, when the Chinese government began a crackdown on the sector’s high debt levels, with numerous developers defaulting on their debts. As a result, many real estate agents quit their jobs. The housing project is unfinished. This has significantly reduced homebuyers’ confidence in the market.
—CNBC’s Evelyn Cheng contributed to this article.
This is a developing story. Please check back later for updates.
