China is seeking to maintain stability in the property market this year after the roller coaster ride of 2016, with measures to prevent surges in metropolises and the growing inventories in small cities.File photo:Xinhua

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

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

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

Xiao noted that efforts 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 more support to projects that temporarily encounter difficulties but can balance their funds.

The remarks of the NFRA official align with the policy mix announced by the central bank and express support for reasonable housing demand. They highlight the detailed work plan for 2024 and instill confidence in the property market, Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Thursday.

As part of its latest effort, the NFRA, together with the People's Bank of China, the central bank, announced a new policy  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.

"The policy mix is a good start for the first quarter and indicates an easing policy toward the housing market this year," Yan noted.

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

Banks' investment in bonds issued by property companies rose by 15 percent compared with 2022. Merger and acquisition loans, as well as extension loans, provided to real estate enterprises, exceeded 1 trillion yuan in 2023. 

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

China's central economic work conference, a tone-setting meeting held last December, stressed that active and prudent efforts should be made to defuse risks in the property sector.

It also said that 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 influence of the new support measures, China's real estate market has shown 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 fell by 9.6 percent compared with the previous year, with the rate of decline narrowing by 0.4 percentage points from 2022. 

The sales area of commercial housing slid 8.5 percent year-on-year in 2023, narrowing 15.8 percentage points compared with 2022. 

The residential sales decreased by 6.5 percent in 2023, marking an improvement of 20.2 percentage points compared with the previous year.