China regulator vows completion of stalled home builds
CHINA’S banking regulator vowed to ensure developers complete construction for pre-sold homes, an attempt to alleviate homebuyer concern as more people threaten to boycott mortgage payments.
The China Banking and Insurance Regulatory Commission (CBIRC) will work with the central bank, the housing ministry and local governments to ensure home delivery and social stability, Liu Zhongrui, an official with the regulator’s statistics department, said during a briefing in Beijing on Thursday (Jul 21).
The authorities will also keep property financing “stable and orderly” while supporting the industry, Liu said.
Regulators are seeking to defuse a growing consumer boycott of mortgage payments that risks spreading the real estate crisis to the banking system. The CBIRC earlier urged banks to increase lending to developers so they can complete unfinished housing projects, said a report published Sunday by a newspaper affiliated with the regulator.
Commercial banks’ bad loans surged 107 billion yuan (S$22 billion) in the first half of the year to 2.95 trillion yuan, as the nation’s economic slowdown weighed on lenders’ asset quality, Liu said. The bad-loans ratio dropped slightly to 1.67 per cent, he added.
The mortgage strike, which began late-June in a stalled China Evergrande Group development in China, has ballooned to over 300 projects across more than 90 cities. The protests have exacerbated the country’s real estate woes and threaten to derail efforts to revive the market amid an economic slowdown.
Property lending has been stable this year with mortgage rates falling, and banks have been granting home loans at the fastest pace since 2019, Liu said.
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