BEIJING (Reuters) – China’s warning that risks remain in the real estate market will promote the industry’s stable development and prevent developers from failing, the government said in a report released at the annual opening of parliament on Sunday. sequential expansion.
Premier Li Keqiang has made guarding against risks to top property developers the government’s top priority this year, following work done at a key economic meeting last December, amid still cautious buyer sentiment one of the tasks.
“The hidden dangers of the real estate market have increased, and some small and medium-sized financial institutions are facing risks,” Li Keqiang said in the government work report 2023 ).
The real estate industry has been grappling with a liquidity crisis since mid-2021, with many developers defaulting or delaying debt repayments and raising capital as they struggle to sell apartments. About half of the 30- sporadic Chinese developers listed in Hong Kong have defaulted or delayed bond payments.
“There are many risks in the real estate market for homebuyers and real estate developers, such as homebuyers threatening to stop mortgage repayments, failure to deliver pre-sale homes, and developers defaulting on debt, which shows a lack of spending power and confidence ,” said Yan Yujin, an analyst at E-House China Research and Development Institute.
“Only by boosting housing consumption demand can other real estate issues, including the financial risks of leading real estate companies, be truly resolved.”
Premier Li Keqiang stated that the government will resolve Housing issues for young people, supporting the needs of homebuyers.
According to another report by the national economic planner, China also insists that “houses are for living in, not for speculation”, although Li did not mention this in the government 2023 job prospect.
The planner stated that China will ensure that developers deliver pre-sale houses and expand the supply of affordable rental housing.
In 2021 , cash-strapped real estate firms have suspended construction on many pre-sale properties, prompting hundreds of buyers across the country to threaten to stop mortgage payments It is rare public discontent.
The housing market has shown some signs of recovery in recent weeks, as house prices rose in January for the first time in a year, helped by aggressive government support late last year and the lifting of COVID-19 containment measures.
However, buyers remain cautious, hampering chances of a sustained rally.
An index tracking Chinese real estate stocks has risen 2.5% so far this year, underperforming a 7% gain in the benchmark CSI 2021, while Hong Kong-listed An index of mainland property developers fell about 3%, reflecting the market’s similarly cautious outlook.
