China Loosens Restrictions On Real Estate Industry In Significant Policy Reversal

Beijing's Central Business District, Seen In September 2021

Chinese real estate companies, along with their foreign investors and partners, can exhale somewhat for the first time in years.

The People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly issued a 16-point plan on Friday to ease restrictions on the country's real estate industry and provide assurance that the government will provide support to prevent a financial collapse, Bloomberg reports.

Some of the new measures pare back or reverse restrictions put in place in August 2020 that precipitated a liquidity crisis at several developers, most notably China Evergrande Group. Among the 16 points are:

— Directing lenders to treat private and state-run developers equally.

— Allowing developers to extend debt due to mature in the next six months for up to a year.

— Instructing the country's finance industry to support the completion of construction projects and the acquisition of struggling developers by healthier companies.

— Making it easier for first-time buyers to afford homes and for mortgage borrowers to repay loans.

PBOC and CBIRC, the two major financial bodies, also set in motion plans to introduce bankruptcy restructuring and real estate investment trusts as options for companies, Bloomberg reports.

In a separate announcement Monday, China also granted an exception to a ban on developers using cash from property pre-sales to fund completion of ongoing construction projects.

The group of initiatives prompted a wave of confidence to flow into market values, with Country Garden Holdings, one of the biggest developers in China, gaining over 50% in Monday trading, CNN Business reports.

An additional announcement of modifications to China's Zero-Covid policy combined with the property market changes give hope the Chinese economy can recover from losses it has suffered over the past year. But a major turnaround could be months away at least, according to separate reports from Bloomberg and the Guardian.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

AI Cloud Firm Nebius Raises $5.75B In Debt To Fuel Data Center Expansion

Aberdeen Goes Global With £700M Merged Fund

Sun Communities Taps Equity Residential Veteran As New CFO

Data Center Deals Propel July CRE Sales Volume To Best Performance Since 2005

Dog Haus Pursues Major Expansion After Tapping Former Jersey Mike's Execs

'Aggressive' Antitrust Settlement Unwinds $100M Zillow, Redfin Deal

Trump's New Canadian Tariffs To Spike Additional Materials Costs

Wells Fargo Moves To Foreclose On $1.3B Workspace Property Trust Portfolio

Turner Construction Hit With Cyberattack, Hackers Claim Leaks Of Military Info, NDAs

Latest Round Of Fannie Mae Senior Staff Layoffs Has Multifamily Sector Anxious

Why Hines Is Restarting Its Development Engine

How Integrated Infrastructure Can Help AI Data Centers Deploy Faster, Build Smarter