China’s top real estate regulator vows to tackle property delivery risks

SHANGHAI (Reuters) – China’s leading real estate regulator has promised to resolutely address the risks posed by overdue residential property deliveries by some top developers in order to maintain social stability, the official Xinhua news agency reported on Saturday.

Wang Menghui, head of the Ministry of Housing and Urban-Rural Development, also told Xinhua that China will keep its property policies consistent and stable while strengthening coordination in areas such as finance and land and market surveillance.

Chinese developers have suffered liquidity stress this year as Beijing stepped up its debt reduction campaign against the bloated sector, causing defaults by heavily indebted players like China Evergrande Group.

Although Chinese regulators eased funding restrictions slightly to avoid hand-landing the sector, Wang ruled out a policy turnaround.

China will not use the real estate sector as a tool to stimulate the economy for short-term growth and will continue to crack down on speculative investments, Xinhua said, citing Wang.

Instead, China will put in place a mechanism to encourage long-term development of the real estate industry while keeping market expectations and land and property prices stable.

Wang said the fundamentals of China’s real estate market have not changed as home buying demand remains resilient amid still rapid urbanization and the need for better living standards due to the coronavirus epidemic.

China’s central bank said earlier on Saturday it would protect homebuyers’ legal rights and better meet their decent living needs, and pledged to promote healthy development of the country’s real estate market.

(Reporting by Shanghai Newsroom; Editing by Kirsten Donovan)