"Guaranteeing the delivery of buildings and stabilizing people's livelihood" has become an urgent task in the current housing work.

However, for insurance companies, the source of funds for "Guaranteed Delivery of Buildings" has always been a problem.

On the evening of August 19, the Ministry of Housing and Urban-Rural Development reported that the Ministry of Housing and Urban-Rural Development, the Ministry of Finance, the People's Bank of China and other relevant departments have recently introduced measures to improve the policy toolbox and support the construction and delivery of overdue and difficult-to-deliver residential projects through special borrowings from policy banks.

This is a major positive for the market.

However, it is understood that not all projects will be included in the scope of special loan relief.

Relevant departments stated that this special loan is precisely focused on "guaranteing the delivery of buildings and stabilizing people's livelihood", and is strictly limited to the construction and delivery of residential projects that have been sold, overdue, and difficult to deliver, and is implemented in a closed operation and earmarked funds.

Through special borrowing and bank loan follow-up, we support the construction and delivery of overdue and difficult-to-deliver residential projects, safeguard the legitimate rights and interests of home buyers, and maintain overall social stability.

At the same time, "the illegal and irregular problems behind the overdue delivery will be seriously investigated and dealt with in accordance with laws and regulations. If the original pre-sale funds of the project are misappropriated, the relevant institutions and personnel will be held accountable." the housing and construction department said.

The shortcomings of special borrowings that have "struck a thousand pounds" in real estate companies' long-term reliance on high-debt, high-leverage, and high-turnover models have become increasingly apparent in the context of the epidemic and industry and market downturns. This has led to the collapse of some sold commercial residential projects due to difficulties in capital turnover.

Root cause of work stoppages or late deliveries.

The emergence of this situation damages the legitimate rights and interests of home buyers and affects social stability.

Relevant departments stated that real estate companies, as the main body responsible for ensuring the delivery of buildings, must actively dispose of assets, raise funds from multiple sources, and strive to complete the task of ensuring the delivery of buildings.

In order to prevent the risk spillover of real estate enterprises, local governments have effectively assumed the territorial responsibilities of "guaranteeing the delivery of buildings and stabilizing people's livelihood" and helping enterprises to do a good job in ensuring the delivery of buildings.

At present, with the joint efforts of all parties, positive progress has been made in ensuring the handover of buildings in various places, but there is still financial pressure.

In response to this problem, multiple departments have jointly introduced measures to support the construction and delivery of overdue and difficult-to-deliver residential projects through special borrowings from policy banks.

However, the project selection for special loan investment is very strict, and it is only used for the construction and delivery of residential projects that have been sold, overdue, and difficult to deliver, with a precise focus on "guaranteing the delivery of buildings and stabilizing people's livelihood", and implements closed operations and earmarked funds.

Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Institute of Urban and Rural Planning, explained that closed operations and earmarked funds mean that after funds are invested in the project, they must produce a "four or two" effect as soon as possible to restore market confidence, follow up on bank loans, and ensure that construction units and suppliers

Able to enter the market quickly, promote resumption of work and delivery, calm market sentiment fluctuations, and be able to smoothly and safely exit after delivery and move on to the next project.

While investing in special loans to provide relief, we must also consolidate the main responsibility of enterprises for self-rescue and implement the territorial responsibilities of local governments.

For such projects, local governments must, on the one hand, coordinate all relevant parties to jointly promote the delivery of buildings and stabilize people's livelihood; on the other hand, they must seriously investigate and deal with the illegal and rule-breaking problems behind overdue delivery in accordance with laws and regulations, and strictly control the projects.

If the original pre-sale funds are misappropriated, the relevant institutions and personnel will be held accountable.

"The current focus is to solve the urgent problems of ensuring the delivery of the building and stabilizing people's livelihood. However, the problems that existed before the project will definitely be investigated afterwards or simultaneously, including violations of laws and regulations, and the misappropriation and extortion of pre-sale funds. Only in this way can we implement

The country has always required the principles of marketization and legalization, and we have consistently adhered to them. Whoever owns the child will take it away, put an end to moral hazard, put an end to the idea of ????being indifferent, and let those who violate laws and regulations receive due punishment," Li Yujia said.

It is not a government bailout. We firmly adhere to the principle of "housing is for living, not for speculation". Since July, credit risks in the real estate industry have intensified, seriously affecting residents' consumer confidence and economic stability.

Data from the central bank showed that the increase in social financing in July was 756.1 billion yuan, 319.1 billion yuan less than the same period last year.

While the incremental data on new credit and social financing fell far short of market expectations, broad money (M2) increased by 12% year-on-year, setting a new high year-on-year growth rate this year.

It can be seen from the M2 data that market entities are not short of money now, but they just don’t want to borrow money and dare not spend it.

An Xin Securities research report stated that as liquidity problems in the real estate industry have fermented, the household sector and related corporate sectors have shown signs of balance sheet shrinkage, which has also been reflected in financial data and asset prices during the same period.

It is expected that the future evolution of the real estate industry will largely affect the process of economic recovery in the second half of the year.

"Recent real estate risk events reflect the exposure to real estate risks since last year and have not been eliminated. In the medium term, they will be a drag on China's macroeconomy. To further develop monetary policy, we must first prevent further real estate credit risks.

Diffusion." said Zhang Jianhua, a professor at Tsinghua University PBC School of Finance.

At present, stabilizing the overall situation is the fundamental principle. Emotional panic or even a collapse of confidence that is transmitted from the real estate sector to the financial market must not occur. This urgently requires the introduction of new policy tools; at the same time, the general tone of "housing is for living, not for speculation" will not change.

This is also something that has been emphasized many times in recent high-level meetings.

On July 28, the Political Bureau meeting of the CPC Central Committee placed real estate in the context of “risk prevention.”