According to Reuters, Chinese local authorities have taken steps to save the real estate market by setting up local relief funds.
Zhengzhou is one of the cities hardest hit by the real estate crisis and was the first to set up a $1.4 billion (10 billion yuan) bailout fund in July this year with funding from the Communist regime.
Zhengzhou City has declared that it will start construction of all stalled housing projects within 30 days by making good use of those special loans.
However, since the local authority requested lower-level officials and housing developers to restart all the stalled projects, most of the works seem to be standstill.
According to Caixin, Chinese property developers do not have enough money to restart projects even as the deadline approaches.
Some projects were unable to continue because the developers were bankrupt. Others have even hired workers to go to construction sites to pretend to start work to avoid scrutiny. For projects that have restarted, developers are not sure how long they can continue to build because of limited funding.
Since their revenue from previous home sales may have been spent on new projects or diverted, these stalled projects must rely on bailouts and loans to restart work.
The Zhengzhou authority announced in September that it had received the first tranche of a $700 million (5 billion yuan) national bailout loan.
According to Nikkie Asia, a local real estate company source said, “Relevant government agencies have checked the amount of funding required to complete each project [that] has stalled, but the source of funding has been delayed. The city’s bailout [fund] is limited, and each project can only get a small portion—not enough to fill the financial gap.”