China's Central Bank Introduces New Loan Rules for Property Developers

The move aims to stabilize the economy and financial markets amidst ongoing debt crisis in the real estate industry.

China's central bank has introduced new rules to expand access to commercial bank loans for property developers, aiming to stabilize the slowing economy and financial markets.
The new policies will allow real estate companies to use bank loans pledged against commercial properties to repay their other loans and bonds and to cover operating expenses.
The move comes as dozens of developers, including China Evergrande, have defaulted on their debts following a government crackdown on excessive borrowing in the industry.
The new rules stipulate that the bank loans cannot be used to buy commercial or rental housing, start new construction, or buy land, and loans cannot exceed 70% of the appraised value of the property being used as collateral.
The impact of the new rules on the overall crisis in the property market remains uncertain, with UBS economists stating that the pace and potential size of such loans remain uncertain.