April 19, 2024

BANGKOK (AP) — China has taken steps to shore up its battered property market and promised more help for renters, while also keeping government spending at the “necessary intensity.”

The moves to boost supply of affordable housing and boost demand come just weeks before top officials gather in Beijing for the annual meeting of the National Congress, a time when the ruling Communist Party will seek to showcase its leadership.

Chinese shares fell again on Friday, dragged down by property-related shares despite a campaign to boost confidence in the slowing economy. The real estate industry’s troubles were highlighted earlier this week with a Hong Kong court ordering the liquidation of China Evergrande, the world’s most heavily indebted developer with more than $300 billion in debt.

China’s property sector accounts for about a third of the country’s economic activity and the industry-wide recession, triggered by a crackdown on excessive lending that began several years ago, has hit growth and undermined the confidence of both investors and consumers. Is done.

Last year the economy grew at a 5.2% annual pace but this year its pace is expected to slow down.

The sluggish property market has also hurt local government revenues from significant land use sales, leading to increased public debt. The Finance Ministry reported on Thursday that land sales revenue in 2023 fell 13.2% from a year earlier.

The government recently expanded access to loans to help developers recover from the recession. On Thursday, Vice Minister of Finance Wang Dongwei pledged to continue spending at “the necessary intensity.”

Various regions in China have released “white lists” of projects that are eligible for loans, a key part of the government’s effort to revive the industry.

The central bank and the State Financial Supervision Administration released a list of 17 measures to support the rental housing market, which will take effect from Monday. Most relate to providing financial services for leasing, promoting investment in rental housing and improving the financial management of rental properties.

“Key points and targeted shortcomings should be highlighted in financial support for the development of the housing rental market, primarily in big cities, for new citizens, youth and other groups,” a document posted on the government website said. The focus should be on solving the housing problems of the United States.”

Its objective is to “support various entities to build, refurbish and operate long-term rental housing and revitalize the existing housing stock, effectively increasing the supply of affordable and commercial rental housing.”

Home ownership in China has expanded widely over the past few decades, following a sweeping housing reform that gave workers ownership of homes that had previously been assigned to them by state-owned companies and agencies, which had once been The centrally planned economy employed most city dwellers. ,

The home ownership rate in China is about 90%, much higher than that of many Western countries, and many urban families buy multiple properties as investments. Boosting the rental market will help provide more housing for youth and others who do not have the means to purchase apartments.

In other steps, some local governments have announced preferential conditions for families with more than one child to obtain mortgages for homes for their own use. In Shanwei, in southern China’s Guangdong province, families with two or more children can get loans 20% more than the normal limit, among other measures.

Meanwhile, the Ministry of Housing and Urban-Rural Development said the first batch of real estate projects qualifying for debt and equity financing in eight cities or provinces need a financing amount of 3.5 trillion yuan ($496 billion).

Elaine Kurtenbach, The Associated Press

Source: ca.finance.yahoo.com

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