The brokerage research report believes that through the establishment of a financing coordination mechanism, the local government is allowed to push the "white list" to financial institutions for approval, which is consistent with the previous "guaranteed delivery of buildings" for the project-level support base adjustment body, and the breakthrough point is to dredge the "bottom-up" feedback path.
Punctuation financial researcher Zhou Yunxun.
Entering 2024, real estate-related policies will be implemented on multiple lines.
On the demand side, Guangzhou officials announced that they would once again optimize the housing purchase restriction policy, and the purchase restriction on housing over 120 square meters would be lifted in the whole region. Shanghai has adjusted its housing purchase restriction policy to support the purchase of houses by singles who are not registered in Shanghai. Suzhou has completely canceled the purchase restriction, no longer reviews the qualifications for buying a house, and no longer limits the area and number of units for the purchase of houses, but the policy of restricting the sale of new houses is still two years.
On the financing side, there has been new progress in the "white list" news of real estate project financing. It is reported that the real estate projects of many real estate companies in different cities, including Country Garden, Longfor Group, China Aoyuan, Jinke Co., Ltd., Sino-Ocean Group, Sunac Group, etc., have been included in the financing "white list" by various local housing and urban-rural development departments. In the first batch of financing "white list", 84% of the projects belong to projects developed by private real estate enterprises and mixed-ownership real estate enterprises, truly implementing the equal treatment to meet the reasonable financing needs of real estate enterprises under different ownership.
Punctuation financial researchers noted that on January 26, the latest policy information revealed at the deployment meeting of the Ministry of Housing and Urban-Rural Development showed that "all localities should take the project as the object and pay close attention to the study and propose a list of real estate projects that can be given financing support". From supporting the financing of real estate enterprises to supporting the financing of real estate projects, what changes are implied by the literal slight differences?
Some analysts believe that the "white list" system is conducive to the financing of high-quality projects of real estate companies, which were previously affected by the market and could have operated smoothly and were not easy to obtain development loans, and the implementation of the new policy will be good for such projects.
At the same time, judging from the published information, the "white list" of real estate project financing is biased towards ensuring the delivery of buildings, and special funds are earmarked. Previously, the main capital was to borrow from superior shareholders, and the subsequent entry of financial institutions will give greater support to the project of guaranteeing the delivery of buildings.
Build a coordination platform for government, banking and enterprise financing
All localities have accelerated the establishment of a city-centered real estate financing coordination mechanism, put forward a 'white list' of real estate projects that can be given financing support, and pushed it to commercial banks within their respective administrative regions to meet the reasonable financing needs of real estate projects and enterprises. "This is the latest information on the policy revealed at the deployment meeting of the Ministry of Housing and Urban-Rural Development on January 26.
The so-called "white list" of real estate project financing refers to the list of real estate projects that can be given financing support by the coordination mechanism according to the development and construction of real estate projects and the qualifications, credit, and financial conditions of the project development enterprises. The coordination mechanism will send it to the financial institutions within the administrative region, and the financial institutions will meet reasonable financing needs or provide other support according to their actual conditions after assessment.
According to Punctuation Finance researchers, this time, the real estate projects of many real estate companies in many cities such as Country Garden, Longfor Group, China Aoyuan, Jinke Co., Ltd., Sino-Ocean Group, and Sunac Group have been clearly included in the financing "white list" by the local housing and urban-rural development department.
A few days ago, the Chongqing Municipal Housing and Urban-Rural Development Commission and the Chongqing Supervision Bureau of the State Administration of Financial Supervision and Administration jointly pushed the "white list" of the first batch of real estate projects in Chongqing to financial institutions, showing that the Longfor Qingyunque project is on the list. Longfor Group told Punctuation Finance and Economics that in the future, Longfor will actively cooperate with relevant departments, actively promote the implementation of policies, continue to operate steadily, and make Longfor's contribution to the stable and healthy development of the real estate market.
Country Garden also has more than 30 projects in Henan, Hubei, Sichuan, Shandong, Chongqing and other places on the "white list". The relevant person in charge of Country Garden told Punctuation Finance and Economics that after entering the "white list", the company's related projects will receive financing support, which will help alleviate financial pressure, promote delivery and asset revitalization, and improve the sustainable operation ability of the project.
In addition, more than 90 projects have been shortlisted in the first batch of "white lists", including Beijing, Tianjin, Chengdu, Chongqing, Zhengzhou, Shenyang, Qingdao, Wuhan, Kunming, Xi'an, Taiyuan, Xishuangbanna and other 20 cities have been implemented. Sino-Ocean Group has about 20 projects on the "white list", including Xi'an, Chengdu, Wuhan, Xiamen and other cities announced in the first batch.
After the real estate development project is included in the "white list", the local government will actively build a coordination platform for government, bank and enterprise financing, guide the project "white list" enterprises and main financing financial institutions, and actively promote project financing. According to China Construction News, as of the end of January, 170 cities in 26 provinces have established urban real estate financing coordination mechanisms, put forward the first batch of real estate project "white list" and pushed to commercial banks, involving a total of 3,218 real estate projects. After receiving the list, the commercial bank reviewed the projects in accordance with the regulations, and has issued loans to 83 projects in 27 cities with a total of 178600 million yuan.
Unblock the "bottom-up" feedback path
So, what kind of real estate projects can be included in the financing "white list"?
According to punctuation financial researchers, the Ministry of Housing and Urban-Rural Development requires the first batch of real estate financing projects to enter the white list needs to meet five conditions: First, the project is under construction. If the project is suspended for a short period of time, but the funds are in place to resume construction and delivery, it can also be included; second, there is collateral that basically matches the financing amount; Third, identify a loan sponsor bank and establish a closed supervision system for loan funds; Fourth, the pre-sale funds have not been diverted or the pre-sale funds have been recovered; Fifth, formulate a plan for the use of loans and a plan for the completion of the project.
Tianfeng ** believes that through the establishment of a financing coordination mechanism, allowing the local government to push the "white list" to financial institutions for approval, which is consistent with the previous "guaranteed delivery of buildings" for the project-level support base adjustment system, the breakthrough point is to dredge the "bottom-up" feedback path, and the decentralization of power and responsibility to the local level may mean that more projects have the possibility of being included in the scope of financing support, and the possibility of financing support at the project level is increased.
In fact, in November 2023, news has been circulating that regulators have drafted a "white list" of Chinese real estate developers. At that time, the list included about 50 large-scale real estate companies, many of which had already taken out insurance. Nowadays, with the implementation of the "white list" of real estate project financing, the financing support object has also shifted from real estate enterprises to real estate projects.
Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center, said that shifting from real estate enterprises to projects is a feasible channel for real estate financing. As long as the real estate project can achieve clear property rights and closed operation of funds, the creditor's rights of financial institutions can be guaranteed, so as to eliminate the disadvantages of information asymmetry between financial institutions and real estate enterprises.
Of course, the "white list" of real estate project financing is not all projects with financial difficulties. According to the Tianfeng ** research report, from the proportion of normal projects and projects with financial difficulties, the proportion of normal development and construction projects is also large. Taking Hubei Province as an example, in the first batch of "white list", there are 158 projects with normal development and construction, sufficient collateral, reasonable assets and liabilities, and guaranteed repayment, involving 466 financing needs600 million yuan, accounting for 655%；There are 63 projects that have encountered temporary difficulties in development and construction, but the funds can be basically balanced, involving 245 financing needs400 million yuan, accounting for 345%。
In addition, compared with the group level, the goals of local companies and even project companies of real estate enterprises are clearer, and there is more room for manoeuvre.
Tianfeng ** believes that the increase in bank loan support at the project level will help alleviate the pressure of capital transfer at the group level, that is, if the high-quality projects of the insuring real estate enterprises meet the requirements of the documents, they will no longer be "one-size-fits-all" by financial institutions due to the group's debt insurance, and the group's development capital flow chain may have the opportunity to re-turn.
Considering that the two requirements of "collateral" and "pre-sale funds have not been withdrawn" have certain pressure on inliquid real estate companies, and the risk appetite for countercyclical bank credit investment may still exist, it is necessary to focus on the actual number of shortlisted projects of insuring real estate enterprises in the future.