China has unveiled plans to boost financing for approved housing projects on a “white list” to 4 trillion yuan ($562 billion) in an effort to counter the ongoing property market slump. The announcement was made by Minister of Housing and Urban-Rural Development Ni Hong during a news conference in Beijing. This move is part of the government’s strategy to revive the property industry, which has been experiencing a significant downturn following a crackdown on excessive borrowing.
In addition to expanding financing for housing projects, the Chinese government will also implement measures to redevelop 1 million urban villages across the country. These initiatives come as authorities intensify efforts to stabilise the real estate market, which was once a driving force of China’s economy but has now become a drag on growth.
To further support the property market, local governments have been granted permission to utilise funds from unallocated government bond quotas and increase debt ceilings. In a bid to stimulate demand, the government has recently reduced outstanding mortgage rates for individual borrowers by an average of 0.5 percentage points and lowered the minimum down payment ratio for second homes from 25% to 15%.
Earlier this year, a list of approved housing projects eligible for financing was announced, with loans for such projects reaching 2.23 trillion yuan ($313 billion) as of the latest update. The government’s proactive measures aim to address the challenges faced by the property sector and revitalise economic growth in China amidst the current market conditions.