Real Estate Financing “Whitelist” Implemented in Multiple Cities
By Liang Qian
In a move to accelerate the implementation of urban real estate financing coordination mechanisms, several cities in China have released the first batch of “white lists” for real estate project financing. This development is expected to have a significant impact on the real estate industry in these cities.
Industry experts believe that providing financing support at the project level will make risks more controllable for banks. This will further enhance banks’ financing support and lending speed for real estate, thereby improving the supply side of the industry and enhancing the ability to “guarantee delivery,” ultimately improving industry fundamentals.
A number of cities, including Nanning, Guangxi, Chongqing, Yunnan, and Hubei, have all announced the establishment of real estate financing coordination mechanisms and have pushed the first batch of real estate project “white lists” to local financial institutions.
The first batch of “white lists” consists of a diverse range of real estate projects with significant financing needs. For instance, Chongqing has announced 314 projects with financing needs of about 83 billion yuan, involving 22 financial institutions. Yunnan revealed that it had organized and guided 16 states (cities) to pass the real estate financing coordination mechanism and screen and determine the first batch of 619 real estate “whitelist” projects with a financing demand of 151.9 billion yuan.
Hubei has identified the first batch of 221 real estate projects in the “white list,” involving 16 cities and states with a financing demand of 71.2 billion yuan. More projects are currently being sorted out for the second batch.
Zhang Dawei, chief analyst of Centaline Real Estate, believes that the projects shortlisted for the “white list” are high-quality projects of real estate companies that were previously in distress but have good conditions. “Many of the real estate projects that can be shortlisted for the ‘white list’ have good conditions. They were previously dragged down by the group’s debt, which led to the suspension of construction. Now there is money coming in. It can be quickly revitalized with just one pull, and the ability to ‘guarantee delivery’ is greatly improved,” Zhang Dawei said.
Liu Shui, corporate research director of the China Index Research Institute, stated that commercial banks will evaluate projects in the “white list” based on project status and financing support standards. Banks will optimize the approval process and shorten the approval time for projects with reasonable assets and liabilities and guaranteed repayment sources.
It is expected that the “white list” initiative will further stabilize market expectations and accelerate the implementation of the “three major projects,” which will promote the gradual stabilization of the real estate market in these cities.