More policies to support the stable and healthy development of the real estate market are being released.
On January 26th, the Ministry of Housing and Urban-Rural Development held the deployment meeting of the coordination mechanism of urban real estate financing, demanding that the coordination mechanism of urban real estate financing be accelerated and effective, supporting the development and construction of real estate projects, meeting the reasonable financing needs of real estate enterprises with different ownership equally, and promoting the stable and healthy development of the real estate market.
The above deployment will mention that it is necessary to adhere to the policy of the city, precise policy, one city and one policy, make good use of the policy toolbox, and fully give the city real estate control autonomy. Each city can adjust its real estate policy according to local conditions. This is also a rare and clear return of regulatory power to cities by the regulatory authorities.
What are the considerations behind giving local governments greater regulatory autonomy?
Li Yujia, chief researcher of the Housing Policy Research Center of Guangdong Provincial Urban Planning Institute, said, "Equality of rights and responsibilities gives urban real estate control autonomy, with the aim of giving local governments the rights, responsibilities and obligations to stabilize the market and industries, implementing local main responsibilities, and strengthening policy support and monitoring and assessment by the state."
An insider of a well-run South China housing enterprise believes that all localities should also wait and see. And in its view, the main problem now is the lack of confidence and expectation, not the immediate effect after policy regulation.
Whether the strict supervision of the project subject can be moderately loosened in various places is also the focus of many parties. "Although there are bail-out funds in various places, after the accident, we encountered more restrictions from local areas than support. At present, the project funds are guaranteed to be delivered and the funds cannot be collected. " An insider of a South China real estate company told Blue Whale Finance.
Since mid-2021, real estate regulation and control has continued to be strict, covering land, finance, real estate market order and many other aspects. By July 2023, Politburo meeting of the Chinese Communist Party proposed to adapt to the new situation that the relationship between supply and demand in China’s real estate market has undergone major changes.
Since then, the central and local governments have successively introduced real estate control policies. According to the monitoring of the Central Finger Research Institute, in 2023, 200 Yu Sheng cities (counties) have issued real estate control policies for over 670 times, and most cities have completely liberalized their restrictive policies.
It is reported that the responsible comrades of the housing and urban-rural construction departments (commissions) of various provinces (autonomous regions and municipalities) and the responsible comrades in charge of the people’s governments of 35 key cities attended today’s meeting. Clearly giving full autonomy to urban real estate regulation and control, what impact it will have on the market, whether it can boost the property market, and whether it will enter a new round of policy easing period is worthy of attention.
In addition to clearly regulating "freedom", the above deployment meeting also mentioned the financing problem that is more critical to the current housing enterprises.
That is, "to establish a coordination mechanism for urban real estate financing, the people’s governments of cities at or above the prefecture level should effectively play a leading role in coordination, quickly establish and operate this important mechanism, timely judge the local real estate market situation and real estate financing needs, strengthen overall planning, refine policy measures, build a communication platform between government, banks and enterprises, promote the accurate docking of real estate enterprises and financial institutions, and coordinate and solve the difficulties and problems existing in real estate financing."
However, unlike the notice jointly issued by the General Office of the People’s Bank of China and the General Office of the General Administration of Financial Supervision on January 24, "Operating loans can be used not only for projects, but also for repaying corporate bonds and loans", the financing support mentioned in the above deployment will focus more on projects.
In view of the current financing problems of some real estate projects, the meeting made it clear that all localities should focus on projects, study and put forward a list of real estate projects that can be given financing support, coordinate the issuance of loans by financial institutions within their respective administrative regions, and accurately and effectively support reasonable financing needs. Before the end of this month, loans can be obtained after the first batch of projects are listed.
After the deployment meeting, a person from an East China insurance company said that he would be more concerned about how to implement it in the future.
Li Yujia said that credit is a credit behavior and is based on trust. "The purpose of establishing a coordination mechanism this time is to establish a docking platform for both parties to fully communicate. Whether the loan is based on the bank’s risk control and credit approval process is market-oriented, legal, and voluntary, and cannot be forced."
Since the end of 2022, relevant departments have successively issued "Three Arrows" and "Sixteen Financial Articles" for enterprise financing, and put forward "equal treatment" and "three no less than". However, according to feedback from many real estate enterprises, the implementation effect of these policies is generally.
Li Yujia believes that the main reason for the general implementation effect is that banks are worried about risks and have low trust in housing enterprises. Therefore, the degree of attention began to shift to the coordination mechanism, that is, the coordination mechanism pushed the qualified loan projects, and the financial institutions cashed in the qualified projects for financing.
Whether the financing situation of housing enterprises has changed after the deployment meeting of the financing coordination mechanism is worthy of attention.