China urges banks to lend for real estate projects amid mortgage boycott

A woman walks near a construction site of apartment buildings in Beijing, China July 15, 2022. REUTERS/Thomas Peter

SHANGHAI/BEIJING, July 18 (Reuters) – Chinese regulators on Sunday urged banks to lend to qualified real estate projects and meet developers’ funding needs when reasonable, in their latest effort to appease concerns over a growing boycott of mortgage payments on unfinished homes. .

The remarks by the China Banking and Insurance Regulatory Commission (CBIRC) came after a growing number of homebuyers across China threatened to stop paying off their mortgages for stalled real estate projects, worsening a housing crisis that has already hit the economy. Read more

Investors continued to dump Chinese bank stocks as well as developer stocks and bonds, even after the CBIRC pledged on Thursday to step up coordination with other regulators to “ensure housing delivery”. Read more

In an interview with the official China Banking and Insurance New on Sunday, the CBIRC reiterated that it would support local governments to promote door-to-door delivery, and said it believed that with concerted efforts, “all difficulties and all problems will be properly solved”.

Specifically, the regulator urged banks to “assume their social responsibility” and actively participate in considering plans to fill the financing gap, so that construction of stalled real estate projects can resume quickly and housing can be delivered to buyers sooner.

He also urged banks to strengthen communication with mortgage customers and support real estate project acquisitions to help stabilize the real estate market.

In addition, the watchdog said financial risks in the country’s northeast Liaoning province had recently increased but were under control, and the government would take measures to prevent risks among small businesses. Chinese lenders.

Reporting by Beijing and Shanghai newsroom; Editing by Hugh Lawson

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