HONG KONG: China’s pledges to shore up its embattled property industry have done little to boost prospects for the sector, according to developers, with access to funding still challenging and many local government authorities reluctant to ease rules more effectively.

       The world’s second-largest economy needs more decisive policy easing at the city level to stimulate demand from wary buyers and inject new credit to stop more property-related firms from defaulting, executives at top developers said.

       Beijing has repeatedly signalled more government support for the sector after bond payment defaults by China Evergrande Group and others rattled global markets and weighed on the economy.

       As part of those efforts, China’s central bank has said financial institutions need to extend real estate loans steadily under prudent management to meet the “reasonable” funding needs of the sector.

       But executives at five developers, all among China’s top 50 by sales, said they have not been able to get new loans from banks.

       The developers said they can now only use cash from sales, which has been diminishing, for building new projects.

       Logan Group told investors earlier this month its bank credit has shrunk since January, with over 10 billion yuan (US$1.6bil or RM6.72bil) of approved bank loans yet to be released, according to a memo seen by Reuters.

       The Shenzhen-based developer, which is negotiating payment extensions with creditors, did not respond to requests for comment.

       An executive of a state-owned bank said guidelines from headquarters was to accelerate the approval of mortgage loans, but stay cautious on private property developers.

       “The negative news headlines of developers failing to meet payment obligations keeps ringing alarms. So far, we are mindful to focus on state-owned developers only.”

       All the representatives of developers and banks declined to be named due to sensitivity of the matter.

       Property investments in China bounced slightly over the first two months of 2022, rising 3.7%, while new construction starts measured by floor area fell 12.2%.

       Overall, home demand remained weak with property sales by floor area down 9.6% during the same period. — Reuters