Whitelist Marginally Improves Real Estate Financing, But Bank's Risk Appetite Yet to Budge (AI Translation)
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- China's Ministry of Housing and Urban-Rural Development and the National Financial Regulatory Administration have established a real estate financing coordination mechanism across 276 cities, proposing around 6,000 projects for financing support exceeding 200 billion yuan. This initiative aims to address liquidity risks faced by some developers since the second half of 2021 by separating project risk from corporate risk, ensuring funding for viable projects despite the developer's financial health.
- The 'whitelist' approach under this mechanism prioritizes projects rather than companies, focusing on those with reasonable financing needs and solid repayment sources. Banks have begun approving loans for these listed projects, although there's caution due to past experiences of indiscriminate tightening in financing. The mechanism has seen mixed responses from banks and local governments, with some pressure on local bank branches to support these initiatives amidst concerns about risk management and moral hazard.
- Despite efforts to improve real estate project financing through this coordination mechanism, challenges remain due to ongoing market downturns and cautious lending attitudes from banks. The effectiveness of the policy is limited by the current demand slump in the property market, with sales continuing to decline significantly compared to previous years.
文｜财新周刊 武晓蒙 陈博 朱亮韬
By Caixin Weekly's Wu Xiaomeng, Chen Bo, Zhu Liangtao
“今年春节没回老家过年，一直在加班，协调推动地方分行房地产融资协调机制‘白名单’项目首单的落地。”一位国有大行总行人士近日对财新说。
"This Spring Festival, I didn't go back to my hometown for the New Year celebration; instead, I was working overtime, coordinating and pushing for the implementation of the first project under the 'whitelist' mechanism for real estate financing at local branches," a person from the head office of a major state-owned bank recently told Caixin.
2024年2月29日，住建部与国家金融监督管理总局（下称“金融监管总局”）联合召开的视频调度会议披露，截至2月28日，全国31个省份276个城市已建立城市房地产融资协调机制，共提出房地产项目约6000个，商业银行快速进行项目筛选，审批通过贷款超2000亿元；按照“应建尽建”原则，3月15日前，地级及以上城市要建立融资协调机制。国务院副秘书长徐守本、住建部部长倪虹、金融监管总局局长李云泽等出席此次会议。
On February 29, 2024, the Ministry of Housing and Urban-Rural Development and the National Financial Regulatory Administration (hereinafter referred to as "Financial Regulatory Administration") disclosed in a video conference that as of February 28, all 31 provinces across China have established urban real estate financing coordination mechanisms in 276 cities. Approximately 6,000 real estate projects were proposed through these mechanisms. Commercial banks quickly carried out project screening, approving loans exceeding 200 billion yuan. Following the principle of "constructing as much as possible," by March 15, cities at the prefecture level and above are required to establish financing coordination mechanisms. Xu Shouben, Deputy Secretary-General of the State Council; Ni Hong, Minister of Housing and Urban-Rural Development; and Li Yunze, Director of the Financial Regulatory Administration attended the meeting.
这是2024年1月5日住建部、金融监管总局对外联合发布《关于建立城市房地产融资协调机制的通知》（下称《通知》）以来的最新进展。近两个月，两部门密集召开会议推动协调机制落地，对这项工作颇为重视。
This marks the latest development since the Ministry of Housing and Urban-Rural Development and the Financial Regulatory Commission jointly issued the "Notice on Establishing a Coordinated Mechanism for Urban Real Estate Financing" (hereinafter referred to as "the Notice") on January 5, 2024. Over the past two months, the two departments have held numerous meetings to promote the implementation of this coordination mechanism, demonstrating their significant emphasis on this initiative.
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