Foshan's Innovative Policy: Accelerating Property Sales and Managing Developer Risk

In a move to alleviate the challenges faced by developers in Foshan, southern China's Guangdong province, local authorities have introduced new policies that allow fir start selling their new properties before fully settling development mortgages with banks.

The innovative approach addresses a problem arising from the default or insolvency of certn real estate companies on their development loans. Banks typically hesitate to release mortgage funds if developers haven't completely repd these loans, resulting in unsold housing units.

As part of the government's proactive strategy, Foshan has allowed developers to initiate property sales even before fully discharging their development mortgages. This easing of regulation ms at facilitating smoother operations and liquidity for embattled firms handling projects acquired from distressed developers.

This initiative underscores efforts by Chinese authorities to tackle the issue of stalled sales and financial stress typically created under conventional bank procedures in such scenarios. It demonstrates a collaborative approach between local governments, banks, and developers to ensure sustnable project development while promoting property market stability.

Moreover, this policy is part of wider government initiatives designed to address concerns over housing sector challenges amidst an ongoing economic downturn and debt crisis. By enabling the early release of mortgage funds for unsold properties, Foshan's move encourages faster sales cycles which can help developers free up capital tied in property projects, thus alleviating liquidity pressures.

This development highlights a proactive stance taken by China towards sustning its real estate sector, thereby mntning market confidence while ensuring financial stability. It also suggests that local governments are actively working to alleviate the burdens faced by developers during periods of economic stress through innovative and supportive policies.

As such, Foshan's policy represents an important step in demonstrating how Chinese authorities are utilizing new methods and regulatory flexibility to support distressed property developers and ensure a smooth flow of capital into the housing sector. This move is expected to bolster confidence among investors while facilitating sustnable development practices across the real estate industry in China.
This article is reproduced from: https://asia.nikkei.com/Spotlight/Caixin/China-s-Foshan-city-allows-developers-to-sell-new-homes-before-repaying-loans

Please indicate when reprinting from: https://www.669t.com/loan_limit/Foshan_Guangdong_Policy_Revolution_Retail_Housing_Sales.html