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China’s central bank has decided to prolong certain measures from a rescue package introduced in November until the end of 2024. These policies aim to strengthen the real estate industry, as the existing support measures have not been effective, and there is an anticipation of additional stimulus being implemented in the near future.
In November last year, the People’s Bank of China (PBOC) released a notification outlining 16 actions to assist the financially strained sector, such as extending loan repayment deadlines, in an effort to alleviate the liquidity problems that have affected it since mid-2020.
According to a statement by the People’s Bank of China (PBOC), the expanded measures promote independent negotiations between financial institutions and property companies. They also provide active assistance to property developers by allowing them to extend their current loans and modify repayment terms. The PBOC stated that existing loans scheduled to be repaid by the end of 2024 can be extended for an additional year.
In addition, the central bank stated that loans provided to support the completion of unfinished projects by the end of 2024 will not be categorized as higher risk during the loan period. Furthermore, for newly issued supplementary financing that becomes non-performing, the responsible institutions and individuals will not be held liable as long as they have taken proper precautions.
Measures and policies that do not have specific time limits will continue to be effective. China’s developers burdened with debt are facing difficulties in securing funds and selling homes, which has undermined confidence in the industry.
Investors and the market anticipate the announcement of more specific stimulus measures later this month during the convening of the influential politburo meeting.
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