Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects; as the beleaguered property sector faced fresh risks from a widening mortgage-payment boycott on unfinished houses. The China Banking and Insurance Regulatory Commission (CBIRC) said that banks should meet developers’ financing needs where reasonable.
The CBIRC expressed confidence that with concerted efforts; “we will properly solve all the difficulties and problems,” the China Banking and Insurance News reported. However, the remarks come as a growing number of home buyers across China; has threatened to stop making their mortgage payments for stalled property projects; aggravating a real estate crisis that has already hit the economy.
Thereafter, Official data showed output in the property sector; which shrank 7% in the second quarter from a year earlier; marking the fourth straight quarter of decline. It’s expected that new real estate loans in June at more than 150 billion yuan ($22.23 billion); compared with a contraction in May. “I think the Chinese government has the will and means to solve the problem; and will likely take swift actions,” said Mark Dong, Hong Kong-based co-founder and general manager of Minority Asset Management.
E-house estimated stalled real estate projects across China involve 900 billion yuan worth of mortgages in the first half; or 1.7% of the total outstanding mortgage loans. Thereon, the regulator hoped these steps would help stabilize the property market by enabling the swift resumption of stalled real estate construction; and delivery of homes to buyers early.
-Reuters.