BEIJING: China will offer more bailout loans for its struggling real estate sector with the first funds expected to become available in the coming days, its housing ministry said today, in the latest move to help kickstart stuttering growth.
Troubles in the property industry have been one of the main headwinds facing the world’s second-largest economy, with a government clampdown on excessive borrowing in 2020 leaving several developers grappling with massive debt and flagging demand.
“In view of the current financing difficulties of some real estate projects,” the official newspaper of Beijing’s housing ministry quoted officials as saying, local governments would “propose a list of real estate projects that can be given financing support”.
“It is understood that loans will be available for the first batch of project lists before the end of the month,” it added.
A national body will be set up to oversee the loans, the report said.
Officials this week pledged new measures to stimulate the economy – which in 2024 expanded at one of the slowest rates in decades – with the People’s Bank of China on Wednesday slashing the portion of cash banks must hold in reserve.
China has issued several rounds of bailout funds for its embattled property sector, with Beijing saying this week that its banks had provided nearly 10 trillion yuan (US$1.4 trillion) in loans to real estate last year.
The property sector – which long accounted for around a quarter of the economy and experienced dazzling growth for two decades – has been beset in recent years by spiralling debt crises at some of its top developers.
Financial woes at major firms such as Evergrande and Country Garden are now fuelling buyer mistrust against a backdrop of unfinished housing developments and falling prices.
A Hong Kong court will on Monday consider a winding-up petition for Evergrande led by off-shore creditors.
And Beijing’s top decision-makers, including President Xi Jinping, pledged at an annual closed-door meeting in December to “actively yet safely defuse risks in the real estate sector” and “meet the reasonable financing needs of real estate enterprises”.