Chinese authorities will provide 200 billion yuan ($40 billion) in special loans to secure the delivery of properties to buyers for residential projects whose construction has stalled due to lack of funds at property developers. A person familiar with the matter said. Increase financial support for the struggling real estate sector.
The Ministry of Housing, Urban and Rural Development, the Ministry of Finance and the People’s Bank of China (PBOC) announced a special loan plan late Wednesday, but gave few details, including the size of the loan. It will be the largest fiscal relief package ever launched by the government to contain the property crisis, which has led to falling home prices and declining property sales.
China to offer special loans to struggling property developers
As the Communist Party of China plans to hold its once-every-five-years congress by the end of this year, the middle class is boycotting the repayment of mortgages on the grounds that the house they bought with a loan is unfinished. It is spreading, and it is in a situation that threatens the stability of society.
The People’s Bank of China (PBOC) and the Ministry of Finance will finance the loans through policy banks such as the China Development Bank and the Agricultural Development Bank of China, said the people, who asked not to be identified because the information is private. Only unfinished and sold homes are eligible for the special loan, he said.
The People’s Bank of China, Finance Ministry and Housing, Urban and Rural Development Ministry did not immediately respond to requests for comment.
Original title:China Plans $29 Billion in Special Loans to Troubled Developers (excerpt)
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