China unveils 300 billion yuan strategy to revitalise property market

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18th May 2024 – (Beijing)  Beijing has pledged a 300 billion-yuan aid package to address the burgeoning inventory of unsold homes, injecting a fresh lease of life into its faltering property sector and, by extension, the wider economy. The initiative, revealed during a Friday media briefing, includes innovative measures to facilitate the acquisition of these properties by state-owned enterprises, which will repurpose them as affordable housing options.

The People’s Bank of China (PBOC) detailed that the financing, described as “re-lending” funds, would be made available at a concessional interest rate of 1.75% to a diverse group of 21 national lenders ranging from policy banks to major commercial and joint-stock banks. According to Tao Ling, deputy governor of the PBOC, this strategic financial manoeuvre is expected to generate approximately 500 billion yuan in bank loans specifically aimed at purchasing these unsold housing units.

“This initiative marks a proactive response by the central government to the shifting demand-supply dynamics in the property market,” Tao Ling remarked. He emphasised the government’s commitment to implementing the plan swiftly and introducing additional supportive measures.

Local governments will be granted the autonomy to opt into this programme based on regional demand and conditions. This policy, applicable indiscriminately across various types of property developers, aims to ensure that already constructed but unsold homes find occupants, thereby stabilising the market.