BEIJING (Reuters) – China’s central bank on Monday extended until the end of 2024 some policies in a November rescue package to shore up the real estate sector, with current supports for the sector failing to gain traction and markets expecting more stimulus to be rolled out soon.
Last November, the People’s Bank of China (PBOC) issued a notice outlining 16 measures to support the cash-strapped sector, including loan repayment extensions, in a push to ease a liquidity crunch that has plagued it since mid-2020.
The extended policies encourage financial institutions and property firms to negotiate independently, and actively support property developers through the rollover of existing loans and the adjustment of repayment arrangements, the People’s Bank of China (PBOC) said in a statement.
An additional one-year extension to these kind of existing loans due to be repaid before the end of 2024 is allowed, the PBOC added.
Separately, loans issued to support the delivery of unfinished projects before the end of 2024 will not be downgraded in risk classification during the loan term, the central bank said.
For newly issued ancillary financing that becomes non-performing, the relevant institutions and personnel are exempted from liability as long as they have exercised due diligence, it added.
Measures and policies without clear deadlines remain in effect. China’s debt-ridden developers are struggling to raise funds and sell homes, prompting a mortgage-repayment boycott among homebuyers which dented confidence in the sector.
The market is expecting more concrete stimulus measures to be announced this month when a meeting of the country’s powerful politburo is held.
(Reporting by Ella Cao, Liangping Gao, Ethan Wang, Ziyi Tang and Ryan Woo, Editing by Louise Heavens and Hugh Lawson)
