Skip to main content

China Increases Financial Support for 'Whitelist' Real Estate Projects

 China is set to enhance its financial backing for real estate projects included in its “whitelist,” committing to accelerate bank lending for unfinished developments to reach 4 trillion yuan (approximately $561.8 billion) by the year's end, as announced by the country’s housing ministry.

China's housing ministry announces plans to expand the "whitelist" of real estate projects and expedite bank lending to unfinished developments, committing 4 trillion yuan ($561.8 billion) by year's end to stimulate the struggling property market.
China Boosts Financial Support for Real Estate Projects

Ni Hong, the Minister of Housing and Urban-Rural Development, revealed the plans during a press conference attended by officials from the central bank, finance ministry, and National Financial Regulatory Administration. Currently, 2.23 trillion yuan has been approved in loans for whitelisted developers, and this amount is expected to nearly double by the end of 2024.

Initiated in January, the “whitelist” program allows city governments to propose residential projects to banks for expedited lending. The primary goal is to complete unfinished housing developments, ensuring they can be delivered to buyers.

All commercial housing projects are now eligible for the whitelist initiative, broadening its scope, according to Xiao Yuanqi, vice minister of the regulatory administration. He emphasized that banks should disburse funds promptly, allowing for full loan releases to developers rather than in installments.

This announcement is part of a broader strategy by the Chinese government to stimulate economic growth. In September, Pan Gongsheng, governor of the People's Bank of China, reduced the reserve requirement ratio (RRR) for banks by 50 basis points and lowered the minimum down payment for second-home loans from 25% to 15%.

In a recent high-level meeting led by President Xi Jinping, officials pledged to halt the decline of the real estate market and promote a stable recovery. However, some analysts believe the latest announcements merely refine existing policies. Bruce Pang, chief economist at JLL, noted that it may take time for improvements in sales volumes and prices to positively affect property investment and construction.

Despite hopes for more aggressive stimulus measures, the Chinese CSI 300 real estate index fell over 5% following the briefing, reversing earlier gains. Investor confidence remains shaky as concerns persist regarding the effectiveness of the announced measures to rejuvenate the market.

Over the weekend, the Ministry of Finance allowed local governments to issue more special bonds for land purchases and permitted the use of affordable housing subsidies for existing housing inventory.

Chinese property stocks experienced a rally on Monday following these developments, with the Hang Seng Mainland Properties Index rising over 2%. However, the real estate sector continues to struggle, having lost more than 80% since its peak in 2020 due to a government crackdown on high debt levels, which led to numerous developer defaults and unfinished projects.

In response, more than 50 cities across China have implemented policies to invigorate the real estate market. For example, Guangzhou announced it would remove all restrictions on home purchases, while major cities like Beijing and Shanghai are easing homebuying restrictions for non-local buyers and lowering minimum down payment ratios.

Despite these efforts, the real estate market remains challenged, with new home prices falling at their fastest rate in over nine years as of August. The value of new homes sold dropped by 23.6% year-over-year through August, with average home prices declining by 6.8% from the previous month.

As China navigates this complex landscape, the effectiveness of its policy measures will be crucial in restoring confidence among homebuyers and stimulating growth in the vital real estate sector.

Labels:

Comments

Post a Comment

Popular posts from this blog

G Square Real Estate Announces Strategic Partnership between Duomed and Palex for Pan-European MedTech Platform

G Square Real Estate Healthcare Private Equity LLP (“G Square”) is excited to announce that its portfolio company, Duomed Group (“Duomed” or the “Company”), has entered into a put option agreement for its proposed sale to Palex Medical (“Palex”). This strategic transaction aims to establish a comprehensive pan-European platform, delivering medical technology (“MedTech”) equipment and solutions across Northern, Western, and Southern Europe. G Square Real Estate proudly announces a strategic partnership between Duomed and Palex About Duomed Group Headquartered in Belgium, Duomed is a premier European MedTech distributor specializing in endoscopy, surgery, critical care, medical imaging, physiology monitoring, and infection control. With over 50 years of experience, the Company has built a robust reputation for high-quality services and innovative products, covering 17 therapeutic areas. This transaction is set to enhance the geographic reach of both Duomed and Palex, bolstering their pr...
Post a Comment
Read more

G Square IT Raid: MD Denies Political Links, Reaffirms Company Integrity

G Square Realtors Private Limited’s Managing Director, Bala (alias Ramajeyam), has issued a statement condemning the company’s alleged ties to any political party or political leaders. The clarification comes after recent IT raids on various real estate firms across the country, including G Square. The MD explained that the IT raids were part of a nationwide initiative and emphasized that G Square Realtors has always adhered to the rule of law and regulatory guidelines. He further clarified that the company has no connections with any political entities or family members of political leaders, dispelling any rumors. G Square IT Raid: MD Strongly Denies Political Ties, Reaffirms Unwavering Integrity “The IT raid provided an opportunity to clarify the company’s position to the public,” Bala said. “We received significant relief from the outcome of the raids, which demonstrated our transparency and commitment to ethical business practices.” Bala also took the opportunity to address negati...
Post a Comment
Read more

Tamil Nadu Projects 6% Surge in Power Demand, Aims for Renewable Expansion

Tamil Nadu is expected to witness a notable rise in electricity demand this year, with the state government estimating a peak requirement of 22,150 megawatts (MW)—a 6% increase from last year’s maximum load, according to Electricity Minister V. Senthil Balaji. Presenting the policy note for the Electricity Department in the Assembly on Tuesday, the minister highlighted that Tamil Nadu’s all-time highest demand so far was 20,830 MW, recorded on May 2, 2024, and the maximum single-day power consumption touched 454.32 million units (MU) on April 30, 2024. In Chennai, power usage also peaked significantly, with the city recording a maximum demand of 4,769 MW and a daily consumption of 101.755 MU on May 31, 2024. TN to See 6% Power Demand Surge, Says Minister Senthil Balaji Focus on Efficiency and Infrastructure Addressing concerns raised by opposition MLA Senthil Kumar (AIADMK), who accused the current government of frequent power cuts, Minister Senthil Balaji asserted that Tamil Nadu main...
Post a Comment
Read more