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Published: 12:14, December 01, 2023 | Updated: 12:14, December 01, 2023
Lenders pledge support to developers
By Wang Ying in Shanghai
Published:12:14, December 01, 2023 Updated:12:14, December 01, 2023 By Wang Ying in Shanghai

A residential property construction site in Yantai, Shandong province. (TANG KE / FOR CHINA DAILY)

A number of major Chinese commercial banks have voiced support in recent meetings for the reasonable financing needs of real estate enterprises, which is a positive signal for the further stabilization of the housing market, officials and experts said on Thursday.

"The active gestures made by Chinese banks show that property companies will receive all-round financial services from banks to ease their liquidity pressure and support to go through the market cycle," said Li Yujia, chief researcher at the Guangdong Planning Institute's residential policy research center.

Chinese commercial banks, including China Construction Bank, Agricultural Bank of China, Bank of Communications and Zheshang Bank, are reported to have held symposiums with real estate developers to underpin the rational financing needs of the latter.

"China Construction Bank will work hand in hand with property developers to promote the benign development of finance and property," the commercial bank told China Daily on Thursday.

During its meeting with property developers, China Construction Bank stated that it will better support property developers' reasonable financing requirements, help improve property enterprises' liquidity through all-round financial services, assist in timely delivery of developers' property projects, ensure people's livelihoods and market stabilization, so as to promote the stable and healthy development of the real estate market, the commercial bank said on its official WeChat account on Monday.

Representatives from six property companies explained their conditions, challenges and coping strategies to the lenders. CCB said it will carefully study the suggestions and requirements of these companies, and continue to optimize its financial products and services.

Being the pillar industry of the nation, real estate has a large-scale, long industrial chain with strong links to many sectors, CCB said. Real estate, the lender further said, is closely linked to the country's overall economic stability and people's livelihoods. Given that China's urbanization is still underway, and that the new urban population is large with gigantic inelastic demand and requirements for a better living, the property industry will remain a pillar industry. It still has strong fundamentals and broad room for long-term stable development.

During the symposium with representatives of prominent property developers, Zhang Rongsen, president of Zheshang Bank, said the lender will actively cooperate with the regulators and local governments on regulation of property markets, to ensure stability of financing channels, contribute to the timely delivery of property projects, and fully implement regulators' requirements on supporting the stability and healthy development of the real estate market. This was disclosed by the lender on its official WeChat account.

The meetings follow a Nov 17 symposium jointly held by the People's Bank of China, the country's central bank, the National Financial Regulatory Administration and the China Securities Regulatory Commission, which studied key issues of real estate finance, credit delivery and the debt risk resolution plans of financing platforms, among others, Li of the Guangdong Planning Institute said.

The Nov 17 meeting asked all financial institutions to treat reasonable financing needs equally regardless of their ownership, support property enterprises' financing activities in capital market, coordinate local governments and related government divisions by providing financial support to the timely delivery of property projects, accelerate real estate finance supply-side reform, and promote the creation of a new real estate development model, according to information in the public domain.

That guidance dovetails with a notice jointly issued on Monday by eight government departments, including the PBOC, which required financial institutions to strengthen support to private enterprises for the latter's growth and development, said Li.

"Although efforts should be made to prevent the extended effect in the short term, the property market's current adjustment will be beneficial to China's economic growth and sustainable development in the long term," said Pan Gongsheng, governor of the People's Bank of China, at a conference in Hong Kong on Tuesday.

According to Pan, a series of measures have been taken, including reduction of the down payment ratio, lowering of mortgage interest rates, encouragement to commercial banks and borrowers to negotiate more favorable interest rates, financial support to ensure the timely delivery of residential projects and financial support to local governments' rental housing programs.

"These measures have gradually paid off, and there are already some positive signs emerging … Overall, China's real estate industry is looking for a new balance," said Pan.

A recent S&P report indicated that both market sentiment and prices in China's property market are starting to normalize, and the ratings agency said the Chinese property market appears to have bottomed out.

"From a long-term perspective, we expect the real estate sector to strike a new balance between supply and demand that adapts to the current market scale, given the top-level policy guidance and actual market demand," local S&P analysts wrote in their report dated Nov 24.

"In our view, China's real estate market has transitioned from a phase where supply falls short of demand to a new stage featuring more balanced supply and demand dynamics."

Liu Zhihua in Beijing contributed to this story.


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