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New pre-sale fund rules expected to ease pressure on Chinese real estate companies

It is reported that Chinese regulators have issued new rules on funds before the sale of commercial housing, which are expected to ease the pressure on real estate companies with limited cash after the debt defeat Evergrande Group.

Report from Daily securities February 10, citing sources claim that the authorities have recently developed and published regulatory measures of the fund for the pre-sale of commercial housing, which “will bring significant benefits to the real estate sector.”

According to sources, the new measures differ from the “Administrative measures before the sale of municipal commercial housing” of 1994 (城市 商品房 预售 管理 办法) in that they provide national unification of rules governing the standardization of pre-sale funds used for their use.

The 1994 measures provided that provincial governments were allowed to develop their own bylaws in accordance with the provisions of these measures.

The new measures stipulate that pre-sale quota management is a “key area” for oversight and verification by municipal and county building authorities to ensure that construction projects have sufficient funds to complete.

According to the source Daily securities that the move will help ease pressure on real estate concerns with credit accounts over the Evergrande debt scandal.

“In fact, after the default of some well-known real estate companies, some local authorities have engaged in over-regulation of funds before the sale,” – said the source.

“The new directive will help correct such behavior and will be useful to facilitate the flow of funds for some real estate companies facing problems.”

https://www.chinabankingnews.com/2022/02/14/new-rules-on-pre-sale-funds-expected-to-relieve-pressure-on-cash-strapped-real-estate-companies/ New pre-sale fund rules expected to ease pressure on Chinese real estate companies

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