A housing project under construction in Shenyang, Northeast China’s Liaoning Province on Monday. The National Bureau of Statistics said that from January to April, national real estate development investment was 4.02 trillion yuan ($624 billion), a year-on-year increase of 21.6 percent. Photo: cnsphoto

Inspired by recent government policies to bolster financing needs of real estate enterprises, major banks in China have proactively initiated roundtable discussions with the cash-strapped developers, weighing more financing support to help them navigate through a property market slump.

China Construction Bank (CCB) announced in a statement on Monday that it has held discussions with six major real estate enterprises in the country, including Longfor Group, Vanke Group, Seazen Holdings, Hangzhou Binjiang, Midea Real Estate, and Dahua Group.

Property developers are currently facing temporary difficulty and liquidity constraint, though the real estate market is showing signs of stabilization. The next important steps are to improve the level of sector management and product strength, the developers said, according to the statement.

CCB noted that as urbanization in China remains in the expansion trajectory, with a sizable population waiting to become new urban residents, housing market demand will continue to rise. The pivotal role of the real estate industry will not change, and in the long-term perspective, the industry still has a solid foundation and extensive space for growth.

The developers attending the meeting were described as of “relatively good-quality,” signaling that the banks are suggested to fully and effectively provide liquidity support for those housing enterprises, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday.

The major lenders are expected to ramp up their efforts over the upcoming period to back up the developers, which could involve steps such as establishing “fast-track” loan approvals, reducing interest rates for housing loans and the mortgages, among other measures, Yan said.

According to media reports, Bank of Communications held a meeting with select developers in Shanghai on Monday. Vanke Group, Greentown China and other 13 developers attended the meeting.

Relevant government departments have released policy guidelines in the past months, to guide banks and other financial institutions towards strengthening support for the cash-strapped developers.

On Monday, China’s central bank and other seven central government departments issued a notice on strengthening financial support for the development and growth of the private economy, including reasonably meet the financial needs of private developers.

More efforts should be made to implement relevant government policies extending financial support for the real estate sector, to shore up the stability of key financing channels such as credit lines and bonds, according to the notice.

In a separate document released on Monday by the central bank, which detailed China’s monetary policy implementation in the third quarter, the People's Bank of China reiterated its commitment to meet the reasonable financing needs of the developers of different ownerships on an equal footing.

The central bank also emphasized its support for the developers to engage in reasonable equity financing on the capital market.

Global Times