You are here: Home » International » News » Economy
Canada confirms 17,325 fresh Covid-19 cases in the week ending Sept 17
Recent raids at PFI premises was called 'Operation Octopus': Sources
Business Standard

China's real estate crisis: CCB to set up $4.2 bn fund to buy properties

The fund will "invest in existing assets" of real estate companies and renovate the properties into rental housing, the lender said in a statement to the Shanghai stock exchange Friday.

China | CCB | stock exchange

Bloomberg News 

CCB, Photo By Bloomberg
Photo: Bloomberg

Bank Corp. will set up a 30 billion yuan ($4.2 billion) fund to buy properties from developers, as policy makers beef up efforts to contain a crisis that’s weighing on the .

The fund will “invest in existing assets” of companies and renovate the properties into rental housing, the lender said in a statement to the Friday. The fund lasts for 10 years, with a possible extension, according to CCB, which is one of China’s big four state-owned lenders.

By establishing the fund, “helps explore the new growth model of the market and facilitates the stable and healthy development of the sector,” it said in the statement. The country’s banking regulator has approved the investment in the fund, it added.

China’s real estate companies have been grappling with a credit crunch after the government earlier tightened lending to the sector to reduce debt risks. The financial health of developers has worsened as sales slumped, sparking a nationwide crisis where home buyers are boycotting mortgage payments to protest the failure of developers to deliver projects.

Authorities have taken several steps to stem the downturn that’s hurt economic growth as well as government income from land sales. They cut interest rates, asked banks to meet the reasonable financing needs of developers, and are offering special loans totaling 200 billion yuan through policy banks to ensure projects are delivered.

The country has also sought to expand the rental housing market to ensure sustainable growth in real estate over the long term and has been spearheading that national strategy.

The bank had 181 billion yuan in outstanding loans related to rental housing by the end of June, 35% more than at the end of December. A home-leasing platform it operates has covered 96% of areas at the city level and above in China, according to its first half report this year.

Subscribe to Business Standard Premium

Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!

Insightful news, sharp views, newsletters, e-paper, and more! Unlock incisive commentary only on Business Standard.

Download the Business Standard App for latest Business News and Market News .

First Published: Sat, September 24 2022. 12:02 IST