Daily Management Review

China's Efforts To Prop Up Its Troubled Real Estate Sector


China's Efforts To Prop Up Its Troubled Real Estate Sector
In an effort to restore its property market, which has been in crisis since officials started cracking down on the industry's debt levels in 2021, China has implemented a flurry of assistance measures in recent months.
However, according to economists, they are not sufficient to quickly turn the sector around.
The sector, which makes up about a quarter of the second-largest economy in the world, has undergone the following recent actions.
Sept. 14 - For the second time this year, China's central bank announced it would reduce the amount of cash that banks must maintain as reserves in order to increase liquidity.
China will reportedly take additional steps on September 1. They stated that proposed steps include gradually lowering price ceilings on new homes as well as relaxing home purchase restrictions in non-core areas of major cities including Beijing, Shanghai, and Shenzhen.
On August 31, China's central bank and financial watchdog loosened some lending requirements for homebuyers, including cutting current mortgage rates for first-time buyers and the required down payment in select areas.
August 30–September 1: Major Chinese cities announce they will permit people to apply for preferential loans for the purchase of their first homes regardless of their credit history.
August 25 - According to state media Xinhua, local governments are allowed to abolish the mortgage restriction so that persons who have purchased a home but later sold it after paying off their mortgage can qualify for preferential financing as first-time purchasers.
China's cabinet approved rules for the design and development of affordable homes on August 25.
On August 21, China lowered its benchmark lending rate for a year.
During their Politburo meeting on July 24, China's top officials deleted the words "housing for living, not for speculation" from the official report.
The cabinet issued rules on July 21 that will support real estate investment and transform "urban villages" or neglected neighbourhoods in megacities.
On July 10, the central bank of China extended several measures from a November rescue plan to support the real estate market until the end of 2024.
June 20 - For the first time in ten months on June 20, China's central bank lowered its important lending benchmarks, or loan prime rates (LPRs).