context: Easing financial restrictions has been on the docket for several months as boosting the real estate market is part of Beijing's plan to reinstall confidence in consumers and boost domestic demand. The delay or easing of the 'three red lines' policy marks a dramatic shift in scaling back attempts to rein in financing risks.&&& Zou Lan 邹澜 PBoC (People’s Bank of China) vice-governor discussed real estate financial restrictions at a 13 January press conference indicating more easing is on the way.
In addition to signalling the easing of the 'three red lines' policy, he also unveiled an action plan for improving the balance sheets of real estate developers, noting specifically that
- It is necessary to improve the parameters of the 'three red lines' policy while keeping the overall framework of the rules unchanged
- the new action plan comprises 21 tasks focused on
- asset activation and stabilising asset prices
- liabilities continuation and restructuring debt
- equity supplementation and increasing financing
- improving expectations and sales numbers
- new policies will be rolled out to support the rental market and the pre-owned home market
- PBoC is researching several structural tools focused on supporting developers access financing and complete pre-sold apartments