“From this policy point of view, it is difficult to supervise the free funds of housing companies. Housing companies can use free funds through bank loans, mortgages, etc.”
Editor’s note: This article comes from Jingwei new , author: Zhang Meng, authorized reprint.
A few days ago, the Heilongjiang Department of Housing and Construction and other 6 departments jointly issued a notice on further strengthening the supervision of the real estate market in the province, stipulating that before the land auction of real estate enterprises, the land purchase funds must be committed to be in compliance with their own funds, not belonging to financial loans and capital markets Financing, etc.
Data map. Photograph by Zhongmeng Jingwei, Zhang Meng
The notification requires strict review of real estate development enterprises’ purchase of development land funds. Localities must establish a review system for development land purchase funds to ensure that real estate development enterprises use compliant own funds to purchase land for development projects.
The notice clearly states that the implementation of corporate commitments requires real estate development companies to submit a commitment letter before participating in the bidding and auction of land for commercial housing development and construction, promising that land purchase funds are compliant own funds, whose sources do not belong to financial loans and capital market financing Etc., and stated that if the commitment is not true, they voluntarily abandon the qualification for winning the bid for development land; check the source of funds, and local natural resource departments in conjunction with the relevant financial departments, strictly check the source of land capital for real estate development enterprises; If an enterprise’s purchase of land funds does not meet the requirements, the natural resource department shall cancel the land bidding qualification and prohibit the enterprise from participating in land bidding and auctioning within two years.
Yan Yuejin, Research Director of the Think Tank Center at the Ease Research Institute, told the Sino-Singapore Jingwei client that the notice mentioned that the strict review of corporate financing for land acquisition is objectively the current control of the real estate market, especially the land market, and the financial behind it. With market-oriented control, some illegal funds have now entered the land market, making the risk of bubbles greater. When the current real estate market cools down, the pressure on the capital chain is relatively large. Heilongjiang introduced this policy at this time to objectively stabilize the subsequent real estate market and prevent some systemic risks. This policy also has positive reference significance to other provinces and cities nationwide.
Xiao Yanyuejin added that land purchases still need to be strengthened to review, reduce the risk of land transactions through high financing leverage, and promote the healthy and stable development of the market. In policy