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China Implements $42 Billion Plan to Stabilize Property Sector

New measures include local governments buying unsold homes and easing mortgage rules to support struggling developers.

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An aerial view is showing buildings in the Shipangqiao Future community in Hangzhou, Zhejiang Province, China, on March 13, 2024. As the only ''high-density old city center'' renovation project in Zhejiang Province, the demolition and resettlement house of the Hangzhou Shifuqiao Future community is now being officially delivered to the residents. The construction of the Hangzhou Shifuqiao Future community has created a ''air square lane'' system featuring three core characteristics: ''three-dimensional market, three-dimensional garden, and three-dimensional connectivity.'' The community includes 1,718 sets of resettlement housing and 1,864 sets of talent rooms, along with neighborhood centers and parks. It is also equipped with top-tier facilities such as schools and medical centers, and it features a layout of 1.45 million square meters of commercial business space, aiming to become a ''high-quality development and construction of common prosperity demonstration zone'' in Hangzhou. (Photo by Costfoto/NurPhoto via Getty Images)

Overview

  • The People's Bank of China will provide 300 billion yuan in loans to enable state-owned enterprises to buy unsold homes.
  • Local governments are encouraged to convert these unsold properties into affordable housing.
  • Mortgage interest rate floors have been removed, and down payment ratios have been reduced for first- and second-time homebuyers.
  • Developers will receive support to complete construction on pre-sold, unfinished properties.
  • The measures aim to address a prolonged downturn in the real estate market, which has seen significant declines in property investment and home prices.