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Harbin among first Chinese cities to announce steps to help property developers By Reuters


© Reuters. FILE PHOTO – Smoke seen coming from the chimneys of a coal-fired heating plant next to new apartments in Harbin (Heilongjiang Province, China, November 26, 2019. Picture taken November 26, 2019. REUTERS/Jason Lee

BEIJING (Reuters), Harbin was one of China’s first cities that announced support measures for property developers. The announcement comes after Harbin’s collapse due to the debt crisis at China Evergrande Group, which has been affecting property companies across the country.

To relieve cashflow pressure, developers must immediately return part of their presale money held in government accounts, Harbin government, capital of northeastern Heilongjiang, stated Sunday on its website.

The statement stated that developers with good credit should be permitted to return to presale activities whenever they can.

Yan Yuejin from Shanghai’s Ehouse China Research and Development Institution stated, “It can be expected that others cities will follow suit. Especially those under great stress due to high inventories.

Evergrande’s debt troubles were far from the center of attention. However, tighter borrowing restrictions have already impacted China’s property sector. It accounts for around a quarter China’s gross domestic products. These stricter borrowing caps have also hampered developers’ ability and cashflow to finance new construction.

Harbin stated that subsidies will be offered up to 100,000yuan ($15.500) to qualified residents who want to purchase homes for their first time.

While property sales and investment have declined, new home price growth has slowed.

Some developers in Zhangjiakou in Hebei Province north of Beijing have begun to reduce prices to increase sales and cashflows.

($1 = $6.4370)

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