China unveils new measures to stabilize housing market

A press conference on stabilizing the property sector is held by the State Council Information Office in Beijing, capital of China, Oct. 17, 2024. [Xinhua/Li Xin]

BEIJING -- Chinese officials announced new measures on Thursday to cement signs of stabilization in the property sector, after a bundle of pro-housing policies rolled out last month brought about "positive changes in the market."

Minister of Housing and Urban-Rural Development Ni Hong and other officials unveiled the fresh stimulus package and assessed the effects of previously announced policies at a press conference, after China's leadership pledged last month to reverse the downturn of the property market and stabilize it.

NEW PRO-HOUSING POLICIES

The government will step up support for urban village and dilapidated housing renovation projects, Ni said, adding that China will renovate an additional 1 million such housing units with measures such as providing monetary compensation to residents.

The minister stressed that all eligible real estate projects will be included in the "white list" mechanism and that their reasonable financing needs will be met through loans.

Under the "white list" mechanism launched in January, local authorities are recommending that financial institutions provide financial support to eligible real estate projects.

As of Oct. 16, loans approved for "white list" real estate projects had reached 2.23 trillion yuan (about 313 billion U.S. dollars), Xiao Yuanqi, deputy head of the National Financial Regulatory Administration, said at the press conference.

It is expected that by the end of this year, the approved loan amount for the "white list" projects will surpass 4 trillion yuan, Xiao said.

This photo taken on March 15, 2024 shows the construction site of a residential complex under an urban renewal project in Jing'an District of east China's Shanghai. [Xinhua/Fang Zhe]

Last week, the Ministry of Finance announced a plan to allow local governments to issue special-purpose bonds to acquire commercial properties for use as affordable housing and to purchase idle land. Song Qichao, assistant minister of finance, told reporters that the ministry will work with other departments to formulate detailed regulations so that this policy will be implemented as soon as possible.

Meanwhile, Ni urged local authorities to increase the provision of affordable housing. Official data showed that the number of affordable apartments nationwide grew to 1.48 million in the first nine months of this year.

"By the end of the year, we aim to provide affordable housing to 4.5 million new urban residents and young people," Ni said.

EFFECTS OF PREVIOUS MEASURES

A raft of pro-housing policies, which were released at the end of September, are kicking in, as evidenced by narrowing declines in property development investment and in sales of new commercial housing, Ni noted.

"Particularly, since the end of September, there has been a significant increase in the number of visits to new property projects and in the number of sale contracts. Transactions on pre-owned homes have also gone up. There have been positive changes in the market," he said.

"Regulated by a series of policies, China's real estate market has started bottoming out after three years of adjustment," Ni stressed.

This photo taken with a mobile phone shows people watching a sand table model of a real estate project in east China's Shanghai, May 28, 2024. [Xinhua/Zheng Juntian]

To ease the financial burden on homeowners, China's central bank has requested commercial banks to lower interest rates for outstanding mortgage loans. The reduction will save borrowers 150 billion yuan, benefiting 50 million households, said Tao Ling, deputy governor of the People's Bank of China, at the press conference.

A key task for China's policymakers in the housing sector is to ensure the delivery of homes under construction. Since China's central government launched a campaign to this purpose in May, 2.46 million homes have been delivered to buyers, according to Ni.