Caixin Explains: How China’s New Housing Rules Rewrite Property Financing

China is delaying when property developers can tap homebuyers’ money, upending a financing model that fueled decades of rapid construction but left households exposed when cash-strapped builders failed to deliver apartments.

Under two sets of rules released Friday by the country’s housing ministry, the natural-resources ministry and financial regulators, developers generally cannot begin preselling apartments until a building’s main structure is topped out. Banks must withhold buyers’ mortgages until the project has been fully completed.