Credit: Visual China

BEIJING, January 31 (TMTPOST) – Nanning, the capital of Guangxi Zhuang Autonomous Region, China, has established a real estate financing coordination mechanism and presented the first batch of “whitelist” real estate projects to local financial institutions, according to reports on Tuesday.

Among the 107 “whitelist” real estate projects, the Beitou Heyuan project has received the first development loan of 330 million yuan from the Nanning branch of China Minsheng Bank.

Since the beginning of 2024, successive policies supporting real estate financing have been issued.

Last Friday, the Ministry of Housing and Urban-Rural Development in China held a meeting for the urban real estate financing coordination mechanism, urging to accelerate the implementation of the mechanism, support the development of real estate projects, and meet the reasonable financing needs of various real estate enterprises.

This meeting highlighted the importance of providing financing support to real estate projects, greatly improving the targeting precision of policy support, and effectively safeguarding the legitimate rights and interests of homebuyers.

Starting from November 2022, the People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission jointly rolled out a package consisting of 16 financial measures to support the recovery of the real-estate market and encourage its healthy development.

Since the beginning of 2023, the Chinese government has continued to introduce supportive policies for real estate financing. However, due to the difficulty of policy implementation and insufficient market confidence, the overall financing situation of real estate enterprises remained sluggish.

According to data released by China Index Academy, the scale of non-bank financing for the real estate industry continued to decline in 2023, when the industry achieved a total of 722.27 billion yuan in non-bank financing, a year-on-year decrease of 15.1%.

In November 2023, China’s Central Financial Work Conference proposed to meet the reasonable financing needs of real estate enterprises of different ownership equally.

According to incomplete statistics, since November 21, at least twelve commercial banks have communicated with real estate enterprises through forums or one-on-one visits to support their reasonable financing needs.

The scale of real estate industry loans from China’s six major commercial banks has maintained growth but showed a declining growth rate, which has dropped by 8 percentage points compared with 2020. The proportion of real estate industry loans in the total loans of the six major banks also continues to shrink.

Against this background, various financing support policies, including the recent real estate financing coordination mechanism, focus on the supply side of the real estate industry. Through the optimization of supply-side policies, the cautious attitude of financial institutions towards the real estate industry is expected to change.

Local governments need to effectively implement financial support policies to provide support for real estate enterprises. For real estate enterprises, the priority is to adjust their marketing strategies according to current policies.

(Note: 1 yuan equals $0.14.)

(This article was first published on the TMTPost App. Author | Zhao Chenhan; Editor | Liu Yangxue)