• Sun. May 26th, 2024

Beijing Urges Banks to Expedite Loans for Struggling Property Developers Amid Real Estate Downturn Fears

BySamantha Nguyen

Mar 25, 2024
Beijing Urging Banks to Expedite Real Estate Loans

Beijing officials are urging Chinese banks to expedite loan approvals for property developers facing a prolonged downturn in the real estate market. This is due to concerns of an impending “Lehman moment” caused by the slump in property values and declining home prices. The real estate market has been struggling for eight straight months, with construction projects remaining unfinished and homebuyer sentiment decreasing.

In response, authorities have implemented a “whitelist” mechanism to support cash-strapped developers. This program, initiated by Beijing last week, covers both state-backed construction companies and private developers in need of new financing totaling 1.5 trillion yuan. Through this program, city governments can recommend residential property development projects to banks for financial support. However, there are concerns that rushing loan approvals could lead to lower loan quality.

By expediting loan approvals for residential construction, authorities hope to revitalize the real estate market. Many Chinese banks have been hesitant to increase credit exposure to the struggling property market, which has limited hopes for a real estate rebound and capped economic growth. The weakening consumer sentiment and growth outlooks have also impacted loan demand and business operations for banks in China. Majority of the top five state-backed lenders will report lower net income for the full-year 2023, reflecting the overall slowdown in the banking sector.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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