Strategic Study On Indemnificatory Housing Financing Mode In China

Little investment and limited financing mode could not meet the requirement ofconstruction scale and speed of indemnificatory houses. Therefore, the research onfinancing mode of indemnificatory houses was necessary.To date, the financing for indemnificatory houses development in China existedmany problems:1) financing mode was limited (only depended on governmentinvestment, without sustainable, recyclable and steady source of funds);2) financialproblem of local government was a constraint;3) the bank credit was numbered, if thebank credit invested into indemnificatory houses development, new risks likemismatch risk, interest rate risk, liquidity risk would rise. Based on the principle ofindemnificatory houses development, taking foreign experience as reference, thispaper proposed novel and feasible financing modes for China. The proposed financingmode was based on four modes: the application of REITs; the support of housingpublic accumulation funds; the application of local bonds investment; the introductionof private capital. The above four modes would solve the existing problemseffectively, making a more sustainable indemnificatory houses development. Inaddition, in this paper, countermeasures and suggestions for the perfect financingmodes were proposed, the government should develop new regulations for thedeveloped financing modes as soon as possible, adjusting market structure to adaptthe new financing mode was necessary, also establishing a new incentive mode for thenew financing mode was required.The case studies showed that the proposed financing mode for indemnificatoryhouses development was feasible. The mode could solve the problem of limitedfinancing mode and could promote the development of finance system.