"The Chinese authorities provided a slew of supportive measures over the weekend to support the property sector, which is likely to improve the market sentiment towards the Chinese economy," said Hao Zhou, chief economist at Guotai Junan International. Chinese regulators expanded a key financing support programme designed for private firms, including real estate companies, to about 250 billion yuan ($35.18 billion) this week. The notice comes as policymakers recently ramped up support for cash-strapped developers. Overall demand, however, remains fragile. More than 200 local governments have taken steps to prop up the distressed sector this year, mainly targeting homebuyers, including by providing subsidies, cutting mortgage rates and allowing for smaller down payments. "That said, on the back of the COVID 20 'measures', the property '16 measures' may generate notable market reactions without dramatically changing the current economic fundamentals," Goldman Sachs analysts wrote, referring to steps announced on Friday to ease some of China's coronavirus curbs. Goldman Sachs said in a note that the basic principles of the property measures are not new. The clampdown has triggered falls in property sales and prices, bond defaults and the suspension of housing construction, angering homeowners which have threatened to stop mortgage payments. The new policy "could be a game-changer for being the first comprehensive supportive policy from central authorities, unlike previous piecemeal steps," Citi analysts wrote in a note.Ĭhina's property sector, once a pillar of growth, has slowed sharply this year as the government sought to restrict excessive borrowing by developers. The PBOC and CBIRC did not immediately respond to Reuters' requests for comment. The sources declined to be named because the notice was confidential. The sources quoted the notice as saying that if a loan is due to mature within six months, real estate companies can be allowed to defer repayments for one more year.Īccording to the notice, trust companies are instructed to provide financing for real estate firms on projects such as rental housing construction and mergers and acquisitions, the sources said.
Chinese regulators are telling financial institutions to allow real estate companies to defer repayment of some loans, such as property development and trust loans, the sources said.
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