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Chinese regulators have introduced new guidelines allowing real estate projects on the government-backed financing “white list” to apply for extended loan rollovers beyond previous limits. This move is aimed at easing short-term debt repayment pressures on construction companies, according to industry sources. Rumors suggest that the permitted extension could be increased from half the original loan term to match the full length of the initial loan, meaning a five-year corporate loan could be extended up to ten years. This would effectively extend the repayment period significantly. An executive at a major developer confirmed these rumors, noting that specific implementation rules are expected to be clarified and announced gradually.
A senior real estate analyst highlighted that over 40% of developers’ total outstanding loans are medium- and long-term debts maturing between 2024 and this year. Under previous extension policies, most of these loans could only be rolled over until the end of 2026. Given the ongoing downturn in the sector, longer extension periods would help alleviate repayment burdens and delay major debt maturities until after 2028.
The regulators’ goal is to “buy time and create space,” offering well-collateralized, white-listed projects a buffer to complete construction and prevent unfinished buildings. This support aims to reinforce project delivery and bolster market confidence, according to Yan Yuejin, vice president of a leading real estate research institute.
The policy adjustment aims to strike a balance between banks’ interests and developers’ needs. If banks were to demand immediate repayment, developers might be forced to sell properties at steep discounts, which could depress local markets and hamper recovery efforts for lenders. Reasonable loan extensions can provide projects with much-needed breathing room, explained Li Yujia, chief researcher at a housing policy research center.
However, a banking industry analyst warned that the policy’s effectiveness depends heavily on actual sales revenues from these projects. If the housing market remains sluggish, the new guidelines may only delay potential risks within the banking system.
The “white list” system, launched in early 2024, involves local governments and financial institutions jointly vetting eligible projects under construction. To qualify, developments must be actively progressing or capable of resumption, possess sufficient collateral, and be under strict fund supervision. Projects on the list gain access to policy support, such as priority loan approvals, quicker disbursements, and eligibility for loan extensions.
This system was created to ease developers’ cash flow challenges through targeted financing, ensure housing delivery, and mitigate systemic risks in the property sector.
Since the first batch of white list project loans, totaling over CNY 520 billion (USD 72.8 billion), was approved at the end of March 2024, the total approved loan balance had surpassed CNY 7 trillion (USD 980.4 billion) as of November, based on publicly available data.
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