Citizens visit a property developer’s sales office in Ningbo, East China’s Zhejiang Province, on March 4, 2023. Photo: VCG

Officials from the National Financial Regulatory Administration (NFRA) on Thursday vowed to step up effort to support the property sector and meet the reasonable financing demand of real estate companies. 

Xiao Yuanqi, deputy director of NFRA, told a press conference on Thursday that the financial sector has an undeniable responsibility to provide strong support to the real estate industry, which has a long supply chain, wide-ranging implications for the national economy, and is intertwined with people's lives. 

Xiao said the NFRA is accelerating the implementation of a coordinated financing mechanism with different municipal government and presents a list of real estate projects that are eligible for financing support to the administrative regions.

Xiao noted that effort will be made to provide targeted support for the reasonable financing demand of property projects. Xiao stressed that financial departments should meet the reasonable financing needs for projects with normal development and provide even larger support to projects that temporarily encounter difficulties but can balance their funds.

Xiao said that in 2023, the Chinese banking system has issued nearly 10 trillion yuan ($1.41 trillion) worth of loans for property development and housing mortgages, which is a significant amount. 

The banks' investment in bonds issued by property companies has grown by 15 percent compared to 2022. The merger and acquisition loans, as well as extension loans, provided to real estate enterprises, amount to over 1 trillion yuan in 2023. 

Moreover, the majority of the 350 billion yuan special loans for guaranteeing home delivery have already been allocated to projects, and commercial banks have provided corresponding commercial financing to ensure home delivery, Xiao said. 

As part of its latest effort, the NFRA, together with the People's Bank of China, the Chinese central bank, released policies on Wednesday to improve commercial property loans. The new policy allows national banks to provide loans to well-regulated property companies and allows the loans to be used in repaying existing property project loans and publicly traded bonds by the end of 2024

China’s central economic work conference, a tone-setting meeting held in last December stressed that active and prudent efforts should be made to defuse risks in the property sector, the reasonable financing needs of real estate enterprises of different ownerships should be met equally, and the building of a new development model for the real estate sector should be accelerated.

Under the range of new supportive measures, China’s real estate market has witnessed some positive signs of stabilization, and its long-term healthy development has a relatively good foundation.

The decline in real estate investment and property sales in 2023 showed signs of improvement, according to data from the National Bureau of Statistics.

Investment in real estate development decreased by 9.6 percent compared to the previous year, with the rate of decline narrowing by 0.4 percentage points from 2022. The sales area of commercial housing declined 8.5 percent year-on-year in 2023, narrowing 15.8 percentage points compared to 2022. The sales volume decreased by 6.5 percent in 2023, marking an improvement of 20.2 percentage points compared to the previous year. 


Global Times