China’s Local Officials Balk at Releasing Pre-Sale Funds to Developers

A new program aimed at helping China’s struggling property developers finish stalled projects by letting them tap homebuyers’ pre-sale payments being held in escrow is running into obstacles, as cities hesitate to execute over fears such funds will be insufficient to complete the projects, industry insiders said.

In November, China’s financial regulator issued a policy allowing developers to access pre-sale funds deposited in escrow accounts by allowing banks to guarantee those funds would be repaid. That program is part of a much broader series of efforts Beijing has made to prop up the nation’s struggling property market.