China Government Issues “Opinions” on Financial Support for Housing Rental Market
The People’s Bank of China and the State Council The State Administration of Financial Supervision and Administration issued the “Opinions on Financial Support for the Development of the Housing Leasing Market” on the 5th, which will be effective from February 5, 2024. The “Opinions” aim to accelerate the establishment of a housing system with multi-subject supply, multi-channel guarantee, and both renting and purchasing, in order to promote the stable and healthy development of the real estate market.
The “Opinions” take commercial sustainability as the basic premise, establish and improve the housing rental financial support system, and focus on supporting the development of professional and large-scale housing rental enterprises with self-owned properties. The document also clarifies that financial support for the development of the housing rental market should mainly focus on solving housing problems for new citizens, young people, and other groups, increasing the supply of affordable and commercial rental housing.
In response to public feedback during the public solicitation of opinions, the government made modifications and improvements, making the “Opinions” more pragmatic and operable. The measures proposed in the “Opinions” cover comprehensive support for affordable rental housing and market-oriented rental housing, with clear guidance and norms given based on summarizing the practical experience of relevant financial institutions.
The aim of the “Opinions” is to expand financing channels for housing rental companies, reduce financing costs, and increase the investment and operation enthusiasm of housing rental companies, promoting the rapid and healthy development of the housing rental market. The “Opinions” also point out the need to enhance the ability of financial institutions to issue housing rental loans, expand bond financing channels for housing rental companies, and support the issuance of housing rental guaranteed bonds.
However, while finance supports the housing rental market, there is a need to beware of related financial risks. The “Opinions” clarify that credit fund management shall be strengthened and direct financing product innovation shall be regulated. The key to preventing financial risks in housing leasing is to ensure that the boundaries are clear and that the name and reality are consistent.
In the next step, positive incentives should be adopted to promote financial institutions to further innovate products and services, and comprehensively use housing rental development and construction loans, housing rental group home purchase loans, housing rental operating loans, personal housing rental loans, credit card installments, etc. products to better meet the needs of various entities in the housing rental market.
It is worth noting that while finance supports the housing rental market, we must also beware of related financial risks. The “Opinions” clarify that credit fund management shall be strengthened and direct financing product innovation shall be regulated.