China eases restrictions on loan approval for commercial housing projects

China is easing restrictions on the approval of bank loans for commercial housing projects by bringing all eligible real estate projects under the coverage of the "white list" mechanism for project financing, a senior official with the National Financial Regulatory Administration (NFRA) on Thursday.

Speaking at a press conference in Beijing, Xiao Yuanqi, deputy head of the NFRA, said that conditions are now ripe for managing the extension of loans for all commercial housing projects in line with the "white list" mechanism.

The "white list" is an itemized register of real estate projects or developers that have been ruled compliant with regulations and thereby eligible for financial support.

Under the "white list" mechanism launched in late January 2024, local authorities can recommend real estate projects eligible for financial support to financial institutions.

The mechanism is part of China's efforts to stabilize the sector weighed by debt problems and boost confidence in an industry that accounts for nearly 6 percent of the country's GDP, according to the National Bureau of Statistics.

Since the beginning of this year, the NFRA has teamed up with the housing and construction authorities to guide the establishment of an urban real estate financing coordination mechanism to include all compliant real estate projects into the "white list", and to encourage financial institutions to step up support for the financing of white-listed real estate projects, according to Xiao.

After the inclusion of compliant real estate projects into the "white list", the management of real estate projects will be more standardized and financing for eligible projects will be more convenient and faster, which will play a big role in safeguarding the construction and delivery of projects and in protecting the legitimate rights and interests of home buyers, said the official.

"At present, the conditions for managing all commercial housing project loans in accordance to the 'white list' mechanism are in place. Real estate projects that meet the 'white list' standards should all be managed in line with the 'white list' requirements to ensure that eligible projects can be covered as much as possible," Xiao said.

"As of October 16, 2.23 trillion yuan (313.1 billion U.S. dollars) of loans had been approved for 'white list' real estate projects. It is expected that by the end of 2024, the amount of loans approved for such projects will double to more than 4 trillion yuan (561.6 billion U.S. dollars). In order to ensure the financing of real estate projects and the completion and delivery of housing projects, we will persistently strive for further optimizing and improving the 'white list' mechanism for financing real estate projects with greater efforts and more concrete measures, so that eligible projects can be included into the list as many as possible, loans can be approved as much as possible, and funds can be appropriated as early as possible," said the official.

China eases restrictions on loan approval for commercial housing projects

The removal of restrictive housing measures in north China's Tianjin Municipality has been met with a positive market response, as more potential buyers headed out to inquire about purchasing property in the city.

Tianjin on Wednesday lifted restrictions on purchasing and transferring new and pre-owned homes as well as price caps on new commodity housing sales, according to a circular which was jointly issued by six government departments, including the municipal housing and urban-rural construction commission.

As the new policy took effect, several housing sales centers in Tianjin's Hexi District saw an increasing number of visitors, as more customers looked to explore property options.

"First, no matter whether the purchase is for a first, second or even more homes, the down payment for personal housing loans is at 15 percent in Tianjin. In addition, the mortgage rate of commercial loans has decreased by 0.6 percent from 3.85 percent to 3.25 percent. These measures have really benefited ordinary buyers," said Zhang Weiyu, a local resident.

Located not far from the capital Beijing, the port of Tianjin has a population of more than 13 million.

In late September, a meeting of the Political Bureau of the Communist Party of China Central Committee underlined the need for efforts to reverse the real estate market downturn and stabilize the market.

Following the meeting, Beijing and the megacities of Shanghai, Guangzhou and Shenzhen all adjusted their real estate policies, introducing a slew of measures to boost their local property markets, while other cities across China have subsequently followed suit.

Home buyers head out to explore options after Tianjin lifts housing restrictions