• Wed. May 22nd, 2024

Beijing Urges Banks to Expedite Loans for Chinese Property Developers Amid Real Estate Slump: The Race to Prevent a ‘Lehman Moment’

BySamantha Nguyen

Mar 25, 2024
Beijing Urging Banks to Expedite Real Estate Loans

Beijing officials are urging Chinese banks to expedite loan approvals for property developers who are struggling in a prolonged downturn. This is due to concerns of an impending “Lehman moment” caused by the real estate slump in China. Home prices have been declining for eight straight months as property values continue to drop, homebuyer sentiment decreases, and construction projects remain unfinished.

In an effort to boost sentiment and confidence in the real estate sector, authorities have implemented a “whitelist” mechanism. This program, initiated by Beijing last week, covers both state-backed construction companies and private developers in need of new financing totaling 1.5 trillion yuan. The program allows city governments to recommend residential property development projects to banks for financial support. However, there are concerns that rushing loan approvals could lead to lower loan quality.

The weakening consumer sentiment and growth outlooks have also impacted loan demand and business operations for banks in China. Majority of the top five state-backed lenders will report lower net income for the full-year 2023, reflecting the overall slowdown in the banking sector. By expediting loan approvals for residential construction, authorities hope to revitalize the real estate market and prevent a potential economic crisis.

By Samantha Nguyen

As a content writer at newsskio.com, I weave words to craft compelling narratives that captivate readers and bring stories to life. With a keen eye for detail and a passion for storytelling, I strive to create engaging and informative content that resonates with our audience. Whether I'm delving into the latest news trends or exploring unique angles on various topics, my goal is to deliver quality content that informs, entertains, and inspires. Join me on this journey as we uncover the news stories that matter most.

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