(Yicai Global) Nov. 22 -- The People’s Bank of China is considering providing CNY200 billion (USD28 billion) of interest-free refinance to the country’s big commercial banks, to help real estate industry specifically for the purpose of supporting the on-time delivery of pre-sold homes that have yet to be completed.

The financing, which would be made available to banks by March 31 next year, will be mainly used on housing projects at risk of not being finished on time to ensure the punctual handover of presold housing and to relieve risks from personal mortgage defaults, the central bank and the China Banking and Insurance Regulatory Commission said at a symposium on financial support measures to stabilize the economy held yesterday. Opinions on the proposal are being sought.

China’s pre-sales system has come under intense scrutiny in recent months after flawed supervision meant that many developers squandered the monies that people paid for their homes on other things, leaving them with nothing left to complete the projects.

‘Guaranteeing the delivery of houses’ was set as a key task by the central government in July and since then a number of assistance measures have been rolled out such as allowing asset management companies to take part in project restructuring and encouraging local governments to form bailout funds.

The central government should set up a long-term mechanism for the smooth functioning of the real estate sector, roll out credit policies in accordance with cities’ distinctive real estate conditions, support rigid demand and improve housing needs, according to discussions at the symposium.

Loans to property developers should be kept stable and reasonable demand for individual mortgages should be supported in order to promote the stable and healthy development of the real estate market.

Editor: Kim Taylor