TL;DR
- On the evening of Friday 28 August all of the three top financial regulators in China released a package of property policies that flooded the investment community
- This is the most complex and broad package seen in years, and many of the policies are not purely designed to support property developers that have been struggling with debt refinancing and weakening demand
- The new package focuses more on easing homebuyer burdens and setting tighter funding schemes on the whole sector
- Surviving developers would face slower turnover, higher funding gaps, and less flexibility to move funds among different projects
What is the package
- The country’s central bank, PBOC, together with the banking regulator, National Financial Regulatory Administration (NFRA), issued an overarching opinion (the PBOC opinion) on credit management across the whole property sector
- The country’s securities regulator, CSRC, issued its opinion (the CSRC Opinion) to support property developers via capital market activities
- The Ministry of Housing and Urban-Rural Development, together with NFRA, issued a notice (the MHURD Notice) on the new sales model of residential properties
- The NFRA issued five more detailed measures (the NFRA measures) on property related loans, covering residential mortgages, development loans,...
