This article is from the Australian Property Journal archive
THE official voice of the Central Committee of the Chinese Communist Party (CCP) has told troubled property companies to get out of the way and stop impacting the health of China’s property market.
The Global Times, the official mouth piece of the CCP, reported that real estate companies that are seriously insolvent should be handled according to market-based principles and rule of law, either subject to bankruptcy or restructuring as appropriate.
China’s housing minister Ni Hong said the government pledging measures to promote the stable and healthy development of the real estate market.
Although the task of stabilising the real estate market remains challenging, there is still great potential and room for growth in China’s real estate sector.
“Development of the real estate market should be viewed from a medium and long term perspective, rather than short term perspective,” Ni told Chinese media.
“We believe that as long as we have confidence, respect the rules, and persist in solving problems as they arise, we can promote the stable and healthy development of the real estate market,” Ni said.
On the weekend Minister Ni real estate companies that “need to go bankrupt should go bankrupt, and those that need restructuring should be restructured.”
The CCP’s “Government Work Report” said that China will refine real estate policies and meet justified financing demands of real estate enterprises under various forms of ownership on an equal basis, so as to promote the steady and healthy development of the real estate market.
The Chinese government remains focused on an ordinary property market taking out “speculation” which risks some 25% of the Chinese economy.
“In defusing risks, the financing needs, a prominent issue facing real estate enterprises, of all companies of different ownership types will be supported equally,” the housing minister added.
“To meet the reasonable financing needs of real estate companies, a whitelist coordinating mechanism has been established covering 312 prefecture-level cities and above across China.”
As reported on Monday by Australian Property Journal, the CCP has drawn up a whitelist of projects, more than 6,000 have been completed, with 82% of these projects by privately-owned enterprises and mixed-ownership enterprises.
According to data released by Australia’s ANZ Bank, China’s unsold residential property had surpassed 3 billion square metres at the end of 2023 – a glut that could take as much as three years to clear.
“As of the end of February, the approved loans through commercial banks have exceeded 200 billion yuan,” Ni reported.
Ni warned local banks of the need to meet the rational funding rules emphasizing the “importance of continuing to strengthen supervision”.
Last year, the Chinese property market saw multiple collapses by property companies including the largest collapse in its history of Evergrande.
“For behaviors from housing developers that harm the interests of the public, they should be resolutely investigated and punished according to law, making them pay the due price.”
