China May Ease ‘Three Red Lines’ Property Rules in Big Shift (3)

China is planning to relax restrictions on developer borrowing, dialing back the stringent “three red lines” policy that exacerbated one of the biggest real estate meltdowns in the country’s history.

Beijing may allow some property firms to add more leverage by easing borrowing caps, and push back the grace period for meeting debt targets set by the policy, according to people familiar with the matter. The deadline could be extended by at least six months from the original June 30 date, the people said.

The easing could mark the most dramatic shift in China’s real estate policy, adding ...