China’s ailing property developers showed signs of a recovery last month when they raised a total of 101.8 billion yuan ($19.9 billion), up 33.4% year on year.
The surge in funding for the troubled sector, which has seen a credit crunch and mortgage boycott, was driven by more state support, according to market researcher CRIC.
But 2022 was still a brutal year for China’s real estate firms with the CRIC survey, which involved 100 companies, revealing 824 billion yuan was raised over the last 12 months, a 38% year over year drop.
The central bank said last week that for cities where the selling prices of new homes fall month-on-month and year-on-year for three consecutive months, the floor on mortgage rates can be lowered or abolished for first-time home buyers in phases.
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China is also reportedly planning to relax restrictions on borrowing for property developers by dialling back the “three red lines” policy.
In November and December, Chinese regulators rolled out a series of measures to bolster liquidity in the sector, including China’s biggest state-owned banks pledging at least $162 billion in fresh credit to ease a cash crunch in the sector.
The property sector, which accounts for a quarter of China’s economy, was badly hit last year as many developers were unable to finish building projects that led to mortgage boycotts by some buyers.
Lockdowns and movement control measures to control the spread of Covid-19 also hurt buyer sentiment.
- Reuters with additional editing by Sean O’Meara
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