Bank loans to fund low-cost rental projects will no longer be subject to regulatory curbs, the People's Bank of China said in a statement yesterday, the latest bid by authorities to tackle a slumping property market.
Under the lending limits that took effect in January last year, China's largest state-owned banks were told to trim their loan exposure to the property sector to 40 percent or less. Banks' mortgage lending was capped at 32.5 percent of outstanding credit. Those exceeding the limits were given a grace period of four years to meet the requirements.
The latest easing comes after banks were recently urged to lend more to developers and speed up mortgage approvals. Authorities have also made it easier for companies to obtain financing to buy assets from weaker real estate firms by excluding such debt from regulatory limits on borrowing.
"It's a strong signal of credit easing," following the move to loosen M&A loans, said Yan Yuejin, research director at E-house China Research and Development Institute.
Separately, embattled Chinese developer Shimao (0813) is in talks to sell part of the stake in its first wholly owned Hong Kong residential project, mainland media ifeng.com reported. The luxury project at 9 Yin Ping Road in Kowloon is valued at HK$20 billion.
The discussions follow Shimao's chairman Hui Wing Mau's plan to sell a 40 percent stake in another luxury project at 15 Shouson Hill Road West to a joint venture for HK$1.05 billion last month.
That came as developer Ronshine China (3301) revealed its January contracted sales, which plummeted 47.1 percent from a year ago to 6.51 billion yuan (HK$7.97 billion).
