Home News Property crisis: China’s banking regulator extends loans as mortgage boycott grows

Property crisis: China’s banking regulator extends loans as mortgage boycott grows

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The Bank of China Insurance Regulatory Commission (CBIRC) reiterated Thursday that it could provide real estate developers with “aggressive credit support” to complete delayed or stagnant projects as soon as possible.

We also urged banks to issue more mortgages to qualified homebuyers to support demand and support the real estate market.

Mortgages increased after the People’s Bank of China Lower mortgage rates For first-time homebuyers, it will increase by two-tenth percentage points in May. Virtually all (90%) of mortgages are issued to the first homebuyer.

“The current pace of real estate lending has reached the fastest pace since 2019,” said Liu Zhongrui, a CBIRC official, at a press conference in Beijing on Thursday.

Last month, bank-issued new developer loans also reached 52.2 billion yuan ($ 7.7 billion), Liu added.

The pledge is the latest in a series of soothing moves by Chinese authorities Rebellion of home buyers nationwide. Increasing dissatisfied homebuyers refuse to pay mortgages for unfinished projects, exacerbating the country’s real estate problems and raising concerns Systematic financial crisis When Social unrest.

This move shows how the liquidity crisis facing developers is spreading to other aspects of society.

problem Started in 2020When Beijing began cracking down on excessive borrowing by developers to curb their high debt and curb runaway home prices.crisis Escalated last year When Evergrande, the country’s most debt-rich developer, scrambles to raise cash to repay lenders.As the real estate sector cools, some major companies Seeking protection from creditors. Many real estate projects across the country have been postponed or suspended due to lack of developer funding.
Many homebuyers have begun mortgage repayments before they own new real estate, raising public anger at deadlocked projects. In China, real estate companies are allowed to sell their homes before they are completed and use the money to raise construction funds.that is The most common method Selling homes in the industry
Chinese homebuyers refuse to pay mortgages for unfinished apartments
Mortgage boycotts can lead to an increase in bad debts at banks, further dampening sentiment in the real estate sector. According to analysts.. If sales decline further, developers can face greater cash problems, which can lead to more defaults and project delays, creating a vicious circle in the market. The real estate crisis will also put a heavy burden on the economy and financial system. Real estate and related industries account for 30% of China’s GDP.

Earlier this week, Zhengzhou, central China, set up the Real Estate Developer Relief Fund to address an unfinished project, one of the first local government bailouts to tackle a mortgage boycott.

When the fund is co-founded by Zhengzhou-based Henan Asset Management and Zhengzhou Real Estate Group, statement By an asset management company on Tuesday. Zhengzhou is the capital of central Henan and is currently the center of the national mortgage boycott.

Both companies are backed by the state’s local government.

The fund will be used to “revive problematic real estate projects and bail out struggling developers,” without revealing the size of the fund, the statement said.

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