(Yicai Global) Sept. 19 -- Since the problem of unfinished housing emerged in July, local authorities in China have introduced policy measures to ensure the delivery of residential projects, according to a report released yesterday. Henan province, where the problem was particularly acute, has promoted the resumption of 694 suspended projects.
The report by real estate research institute China Index Academy said that since July, nearly 30 provinces and cities have rolled out measures to guarantee the delivery of real estate projects, including introducing funds from local state-owned enterprises and financial institutions to revitalize them. In August, the central government also proposed support for the construction and delivery of overdue projects through policy bank loans.
On September 17, Wang Yi, deputy director of the Department of Housing and Urban-Rural Development of Henan province, disclosed at a press conference that the province has promoted the resumption of construction at 694 suspended projects this year, and 50 have since been completed and delivered.
The Henan provincial government and its capital city of Zhengzhou have respectively set up a real estate rescue fund with a quota of CNY10 billion (USD1.4 billion) and is seeking special loans from national policy banks. Currently, Zhengzhou has obtained CNY5 billion (USD700 million) in loans, Wang said.
Thanks to the support measures, China’s housing completion area reached 48.3 million square meters in August, a sharp rebound of 42.5 percent from July, but still down 2.5 percent over the same period last year, according to the latest data published by the National Bureau of Statistics.
As China’s real estate financing environment has continued to tighten since the second half of last year, many residential projects have been halted due to a shortage of funds from developers. In July, owners of about150 unfinished projects in more than 20 provinces and cities across the country issued a joint statement saying that they would stop repaying mortgage loans until the property construction resumed, Yicai Global reported earlier.
TF Securities said in a research report that as a key city in this round of real estate risk resolution, Zhengzhou has played a significant role as a reference point, and its housing protection measures have helped in eliminating industry debt risks, optimizing corporate transformation and boosting the market confidence.
Editors: Dou Shicong, Tom Litting