China Real-Estate Projects Set to Receive Loans Under ‘Whitelist’ Program
Thousands of real-estate projects in China are set to receive funding under Beijing’s new “whitelist” financing program, as policymakers intensify efforts to rescue the property sector from a deepening liquidity crisis.
By the end of January, 170 cities in China’s 26 provinces had proposed their first batch of more than 3,000 favored projects to commercial banks, with a total 17.86 billion yuan ($2.48 billion) of loans already earmarked for 83 such projects, state media reported Sunday, citing official sources.
However, analysts doubt the effectiveness of the mechanism, cautioning that it would be hindered by banks’ reluctance to lend to the crisis-hit sector due to worries over developers’ profits and asset quality. Analysts also say the new funding scheme might be “too little, too late,” considering the potential funding gap for China’s unfinished presold homes.
Beijing has rolled out a flurry of support measures since late last year to aid the ailing real-estate market, allowing more people to buy homes with lower mortgage rates and removing some of the financing restrictions previously imposed on property developers.
However, those measures have failed to revive the beleaguered sector, shown by dismal housing data. In 2023, property investment fell 9.6%, while new construction starts dropped 20.4% and home sales by value declined 6.0%.
In the meantime, China’s 100 largest developers recorded a deep slump in new-home sales in January, according to data provider China Real Estate Information. These large developers sold homes valued at $32.83 billion, down 34% from a year earlier, marking the worst month of sales since at least July 2020, when the data provider changed how it calculates them.
Of the 3,218 projects on the whitelists, 84% are from private builders and companies with diversified ownerships, the state-run China Real Estate Business Weekly reported. These include cash-strapped Country Garden Holdings, with more than 30 projects across China included in the funding scheme, according to state-owned China Securities Journal.
China’s top leadership is also trying to chart a new path for the country’s housing system, renewing its pledge to offer more affordable government-funded housing to help ease the economic toll from the property sector’s downturn. However, the sustainability of such a push would be tested by local governments’ fiscal woes, as the economy slows and land sales revenue dries up, economists say.
China’s central bank last month provided CNY150 billion of low-cost funds for lending to housing and infrastructure projects under its pledged supplementary lending facility. It injected CNY350 billion under the same scheme in December, the first monthly increase since late 2022.
The loans were made to state-owned policy banks and are intended for “major projects,” including government-subsidized housing and urban village renovation, the central bank said last month.
