On November 27 this year, China** issued a document titled "Notice on Strengthening Financial Support Measures to Help the Development and Growth of the Private Economy", and eight departments jointly proposed 25 measures aimed at supporting the development of the private economy. Among them, the relevant measures on the financing of private developers have attracted much attention. The circular emphasizes the need to smooth diversified financing channels such as credit, bonds, and equity, maintain the stability of key financing channels, and reasonably meet the financial needs of private real estate enterprises. The introduction of this policy has brought hope to the troubled private developers and injected new impetus into the development of the economy.
In the past two years, many developers have faced unprecedented difficulties, especially private developers. Due to the downturn in the property market and the sudden change in the overall property market environment, as well as the changes in the financing environment in recent years, many private developers have fallen into difficulties. In particular, after the introduction of the three-red line policy, banks have restricted the issuance of loans to developers, and even adopted measures such as withdrawing loans and cutting off loans, which has led to further tightness in the cash flow of developers. After the cash flow was affected, many projects fell into a state of suspension or even unfinished, resulting in difficulties in real estate sales and further difficulties in recovering funds. The difficulty in recovering funds has affected the developer's ability to repay debts and project construction, forming a vicious circle.
According to the latest data released by the central bank, as of the end of the third quarter of 2023, the balance of RMB real estate loans in China was 5319 trillion yuan, down 02%；The growth rate of real estate loans was 17 percentage points, lower than the growth rate of other loans by 111 percentage point;In the first three quarters, it decreased by 33.3 billion yuan, an increase of 882.1 billion yuan year-on-year. As of the end of the third quarter of 2023, the balance of real estate development loans was 1317 trillion yuan, a year-on-year increase of 4%, the growth rate was only 03 percentage points. These data show that the current growth rate of bank lending to developers is relatively slow, and many developers are unable to obtain new loan support.
Now, the new policies issued by the eight departments make it clear that they will increase support for private enterprises and private developers. Specifically, the new policy requires major banks to conscientiously implement the relevant notices issued by the central bank, treat state-owned real estate enterprises and private real estate enterprises equally, reasonably distinguish the risks of project subsidiaries and group holding companies, and ensure that eligible real estate projects can be supported by reasonable financing needs. In addition, the new policy also encourages financial institutions to provide financial support for real estate enterprises in mergers and acquisitions, commercial pension real estate, rental housing construction, etc.
The implementation of these financial measures means that developers with stable fundamentals and short-term liquidity will have easier access to bank credit support. With this support, developers will be able to obtain more funds to pay off debts, build projects and ensure project delivery. This will help solve the liquidity problem of developers, which in turn will stabilize the property market. For struggling developers, these measures will be a lifesaver and help boost the economy.
Through the analysis of the new policy, we can see that the support for private developers has been strengthened. These new financial support measures will ease the financial pressure on developers and promote the stable development of the property market. If private developers can get out of the predicament, it will not only have a positive impact on the development of the property market, but also have an important impact on the healthy development of the economy. At the same time, this is also an important measure for the development of the private economy, which means that the importance and support for private enterprises are increasing. It is believed that under the guidance of these policies, private developers will be able to get rid of their difficulties, regain development opportunities, and contribute more to economic development.