(Yicai Global) July 11 -- China will prolong its policies introduced last November to support the real estate industry till 2024 to ease property developers' financing troubles to deliver pre-sold homes.

Regulators encourage financial institutions and developers to negotiate one-year extensions for existing loans and financing till 2024, according to a notice issued by the People’s Bank of China and the National Administration of Financial Regulation yesterday.

Additional capital issued by commercial banks for special loan support projects will not be downgraded by 2024. Even if the lending turns out to be bad debt the relevant institutions and personnel who have fulfilled their duties may be exempted from liability. Besides these, other supportive policies that have no expiry date will continue to be effective, officials told Yicai Global.

In November, the central bank and the China Banking and Insurance Regulatory Commission, which was later named the NAFR, announced 16 measures to shore up the property industry to encourage financial institutions to help property firms roll over their debts and defuse their risks.

The newly extended timeline is expected to help ease property firms' financial pressures, reduce debt risks, and promote the timely delivery of pre-sold homes while boosting business confidence.

The environment is becoming more friendly in other ways too. Local governments are relaxing their restrictions on home purchasing and housing loans, reducing taxes and fees on real estate transactions, and cutting loan interest rates to boost the property market, per Wang Qing, chief macroeconomic analyst at Golden Credit Rating.

In the third quarter, governments may increase their special credit lines to ensure that pre-sold homes are delivered on time, and even introduce more targeted tools, Wang added.

The property market is expected to rebound by September, and investment should pick up in the fourth quarter to boost consumer and investment confidence, promote economic growth, and prevent major economic and financial risks, Wang predicted.

Editor: Emmi Laine