Some real estate companies still need some time to digest the accumulated risks, and the "16 Financial Policies" will be extended until the end of next year. Real estate | Term | Risk
On Monday evening of this week, the People's Bank of China and the State Administration for Financial Supervision and Administration issued a notice on extending the policy period related to financial support for the stable and healthy development of the real estate market, uniformly extending two policies with applicable periods in the "16 Financial Measures" for the real estate industry issued in November last year until the end of December 2024.
Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated at a press conference today that the "Notice" is a decision made based on the current situation of the real estate market. Since the beginning of this year, the overall real estate market has shown a stabilizing trend, but the long-term risks accumulated by some real estate companies still need some time to gradually digest. Therefore, the government should guide financial institutions to continue extending the existing financing of real estate enterprises and increase financial support for guaranteed delivery of properties. At the same time, in combination with the needs of the guaranteed delivery of buildings work, the period of the 200 billion yuan guaranteed delivery of buildings loan support plan will be extended to the end of May 2024.
In recent years, some development enterprises have engaged in long-term "high leverage, high debt, and high turnover" operations, with uncontrolled expansion of asset side land, construction in progress, and diversified operating assets, resulting in high liabilities.
According to data from the financial sector, from the perspective of debt source structure, nearly 7% of the liabilities of real estate enterprises include personal advance payments for housing and upstream and downstream enterprise advances. The proportion of financial liabilities is about 31%, of which bank loans account for less than half. From the perspective of the bank's real estate credit structure, the balance of real estate loans is over 50 trillion yuan, of which the balance of personal housing loans is close to 40 trillion yuan. Relying on household income to repay loans on a monthly basis, the non-performing loan rate remains below 0.5% for a long time.
Zou Lan pointed out that for personal housing loans for properties that have already been sold but have not been completed and delivered on time, according to current laws and regulations, priority will be given to protecting the interests of homebuyers. This part of the loan may face certain risks, but the proportion of the total amount is very low and the risk is controllable. In terms of real estate development loans, the current balance is about 13 trillion yuan, of which the balance of real estate development and affordable housing construction loans is about 6 trillion yuan, with guaranteed repayment; The amount of loans undertaken by development enterprises is approximately 6 to 7 trillion yuan, but due to difficulties faced by some development enterprises, the non-performing loan ratio has increased. However, compared to the total amount of bank loans, the amount is very small.
Zou Lan stated that the financial department will adhere to the positioning of "houses are for living, not for speculation", cooperate with relevant departments and local governments to solidly ensure the delivery of buildings, people's livelihoods, and stability, meet the reasonable financing needs of the industry, and continue to create a favorable financial environment for the orderly clearance of industry risks.
"The supply and demand relationship in China's real estate market has undergone profound changes. In the past, policies introduced during the long-term overheated stage of the market have marginal optimization space. The financial sector will actively cooperate with relevant departments to strengthen policy research, improve policy accuracy based on urban policies, better support rigid and improved housing demand, and promote the stable and healthy development of the real estate market," said Zou Lan.