China has taken a small step to bolster its ailing real estate market by extending authorities’ loan support for contractors, signaling that more economic support measures will be taken soon.
Leading public finance newspapers published news on Tuesday pointing to the possibility of adopting policies to further support the real estate sector, along with measures to boost business confidence. Previously, the Chinese administration had taken a decision that allowed financial institutions to extend the maturity of loans given to real estate companies by one year.
A joint statement Monday by the People’s Bank of China and the National Financial Regulatory Administration stated that the goal is to ensure the delivery of houses under construction.
Macquarie Group Ltd. According to China Economist Larry Hu, this step is far from stabilizing the real estate sector. “Ultimately, if the housing market remains weak, banks’ credit risks will remain high. However, this step can also be considered as a signal that more steps will be taken.”