China unveils “historic” measures to stabilize crisis-ridden real estate sector







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by Liangping Gao and Clare Jim

BEIJING/HONG KONG – China on Friday unveiled measures described as “historic” to stabilize the crisis affecting its real estate sector, by authorizing local governments to buy certain apartments, easing access to loans and promising to deliver buildings currently under construction.

Investors hope that these measures are a harbinger of greater interventionism from the central government to compensate for the drop in demand for new and old apartments, the fall in housing prices and to reduce the number of unsold apartments.

The real estate sector, which accounts for nearly a quarter of Chinese gross domestic product (GDP), has been in crisis since 2021 while demand for new or old housing is declining in China.

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According to the China Real Estate Newspaper, a publication supervised by the Chinese Ministry of Housing, these “policies” mark a “historic and significant moment” for the real estate sector.

“The fact that governments are stepping in to buy homes is a positive and encouraging development,” said Larry Hu, chief China economist at Macquarie.

After numerous measures introduced to revive the real estate sector over the past two years, the Chinese Ministry of Housing has accepted that local governments can ask public companies to acquire “certain” homes at “reasonable” prices.

The homes will be intended to be affordable housing, said Deputy Prime Minister He Lifeng.

Local governments, some heavily in debt, will be able to buy back land sold to real estate developers, he added, also promising that authorities “will fight” to complete real estate projects already launched.

Furthermore, the Chinese central bank announced that it would release 300 billion yuan (around 38 billion euros) for a loan mechanism for affordable housing, further lower interest rates and ease loan conditions.

The Chinese government has launched a campaign to encourage owners to replace their old apartments with newer buildings.

The new program is supposed to help Chinese cities get rid of an ever-increasing volume of unsold new apartments and provide some liquidity to struggling property developers.

(Reporting by Liangping Gao, Ella Cao and Ryan Woo in Beijing and Clare Jim in Hong Kong; French version Zhifan Liu, editing by Kate Entringer)











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