China Raises Loan-Support for Developers amid Mortgage Boycott
Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects as the beleaguered property sector faced fresh risks from a widening mortgage-payment boycott on unfinished houses. The China Banking and Insurance Regulatory Commission (CBIRC) told that banks should meet developers' financing needs where reasonable. The CBIRC expressed confidence that with concerted efforts, "all the difficulties and problems will be properly solved," the China Banking and Insurance News reported. The remarks come as a growing number of homebuyers across China threatened to stop making their mortgage payments for stalled property projects, aggravating a real estate crisis that has already hit the economy. The latest news helped banking and property stocks recover some of their recent losses. China's banking index, which tumbled 7% to a more than two-year low last week, bounced 1.4% on Monday. Chinese real estate stocks gained 3.1% on the mainland, and jumped 3.7% in Hong Kong. The rebound in Chinese banking stocks was also aided by news that China will accelerate the issuance of special local government bonds to help supplement the capital of small banks, part of efforts to reduce risks in the sector. China may also allow homeowners to temporarily halt mortgage payments on stalled property projects without incurring penalties The report added that homeowner eligibility and the length of grace periods would be decided by local governments and banks, and the yet-to-be-finalised proposal from financial regulators would require approval from senior Chinese leaders.
Tags : The China Banking and Insurance Regulatory Commission (CBIRC) China. Loan-Support Developers Mortgage Boycott