China’s commercial housing inventory has recently surged, surpassing previous records from over a decade ago. Recognizing the challenges of a growing surplus, the Chinese mainland’s leadership emphasized the need to reduce housing stock and enhance the quality of new developments. In a meeting on April 30, officials from the Political Bureau of the Communist Party of China (CPC) Central Committee outlined measures to expedite the construction of a new model for real estate development and promote high-quality growth in the sector.
On May 17, the People’s Bank of China and the National Financial Regulatory Administration jointly introduced a series of real estate policy measures. These initiatives include establishing a 300-billion-yuan re-lending facility for government-subsidized housing, lowering minimum down payment ratios for individual housing mortgages, removing the lower limit on individual mortgage rates, and reducing the loan rates of housing provident funds across all terms by 0.25 percentage points. Since the implementation of these policies, some cities have already observed initial positive effects.
The core focus of these new policies is to reduce housing inventory. By utilizing the re-lending facility for government-subsidized housing, the government aims to convert surplus commercial housing stock into affordable housing. In the short term, this approach helps alleviate financial pressures on real estate developers, fosters healthier capital operations in related industries, and injects new momentum into the macroeconomy. In the long term, it contributes to a more balanced housing supply system, aiding rural migrant workers in settling in urban areas and becoming “new urban residents.”
Reference(s):
China's real estate policy combination shows preliminary effects
cgtn.com