BEIJING/HONG KONG: The Chinese city of Zhengzhou will help ensure that developers have enough funds to complete houses under slum upgrading projects with support from the Development Bank of China, two sources told the aware of the situation.
Zhengzhou Real Estate, which is backed by the Henan provincial government, will borrow on behalf of developers and set up project companies for slum upgrading projects in need of financing, according to the sources and an official document seen by Reuters.
The Zhengzhou city government and China Development Bank, one of the country’s top political lenders, did not immediately respond to a request for comment.
Zhengzhou, which is in Henan province, has been at the center of a mortgage boycott by homebuyers that erupted across the country this month after scores of home construction projects were delayed or left behind. unfinished due to developer financial problems, COVID-19 and severe flooding.
Media reported on Wednesday that the Zhengzhou city government had met with several major developers and proposed ways to solve the problem of unfinished houses, including developer loans, mergers and acquisitions, liquidations and restructurings, as well as ‘by turning them into subsidized rental housing.
Zhengzhou Real Estate set up one of China’s first bailout funds with state-owned Henan Asset Management last week.
The real estate company plans to use 20 billion yuan to acquire 50,000 units and rent them out, according to a notice issued by Zhengzhou authorities this month.
In an attempt to revive the indebted sector and ease pressure on the economy, authorities will help property developers by providing 1 trillion yuan ($148.2 billion) in loans for stalled developments, it said on Thursday. the Financial Times.