China has softened a year-long limit on loans for its property sector to fund public rental housing, the latest move in authorities’ attempts to deal with a slumping property market, reports Bloomberg. Bank loans to fund low-cost rental projects will no longer face regulatory limits, the People’s Bank of China said in a statement on Tuesday. The rules required banks to reduce their loan exposure to the property sector to a certain level.
The move is one of the clearest signs yet that Chinese policy makers are easing up on a clampdown on leverage in the property sector that’s slowing growth in the world’s second-largest economy. Starting more public real estate projects may help counter the slowdown in development as debt-laden builders preserve cash.
The latest easing comes after banks were recently urged to lend more to developers and speed up mortgage approvals. Authorities have also made it easier for companies to obtain financing to buy assets from weaker real estate firms by excluding such debt from regulatory limits on borrowing.