Chinese regulators Sunday urged banks to extend loans to qualified real estate projects and meet developers financing needs where reasonable, in their latest effort to ease concerns triggered by a widening mortgage-payment boycott on unfinished houses.
The remarks by the China Banking and Insurance Regulatory Commission (CBIRC) came after a growing number of home buyers across China threatened to stop making their mortgage payments for stalled property projects, aggravating a real estate crisis that has already hit the economy.
Investors have continued to dump Chinese banking stocks as well as developers’ shares and bonds, even after the CBIRC vowed Thursday to strengthen its coordination with other regulators to “guarantee the delivery of homes.”
In an interview with the official China Banking and Insurance News on Sunday, the CBIRC reiterated that it will support local governments to promote home delivery, and expressed confidence that with concerted efforts, “all the difficulties and problems will be properly solved.”
More specifically, the regulator urged banks to “shoulder social responsibility” and actively participate in the study of plans to fill the funding gap, so that the construction of stalled real estate projects can be resumed swiftly, and homes can be delivered to buyers early.
It also urged banks to strengthen communication with mortgage clients and support acquisitions of real estate projects to help stabilize the property market.
In addition, the watchdog said that financial risks in the northeastern province of Liaoning has been growing recently but were under control, and the government will take measures to prevent risks at China’s small lenders.