Chinese Vice-Premier He Lifeng called on local governments to purchase undeveloped land and unsold homes from property developers in a strong signal of Beijing’s determination to rescue the property sector and shore up the broader economy.
“Local governments should recover or purchase the idle stockpile of residential lands properly according to the situation, to help ease pressure on distressed developers,” He said during a meeting on Friday, according to a Xinhua News Agency report.
Local governments can also purchase unsold homes to serve as affordable housing backup, at reasonable prices and in light of their needs, he added.
He stressed the importance of the property sector and the need to “carry on the battle” to surmount the risks that unfinished and unconstructed homes represent. The health of the property market is tied closely to social wellness and economic development, He said, according to Xinhua.
A media briefing at 4pm on Friday in Beijing on State Council policies, to be attended by officials from the ministry of housing and urban-rural development, the ministry of natural resources and the central bank, is expected to unveil more measures to shore up the housing market, with a special focus on supporting policies to ensure home delivery.
It also coincides with a call from the People’s Bank of China (PBOC) on Friday to remove a national lower limit on mortgage rates for first and second homes. The PBOC also cut down-payment ratios for first- and second-time buyers to 15 and 25 per cent, respectively, compared with 20 and 30 per cent previously.
In another move to stimulate demand, the PBOC lowered interest rates on loans tied to individuals’ housing provident funds by 0.25 percentage points. “The policy adjustment on housing provident funds will lower the cost of home purchases and encourage potential buyers to take out loans,” said Yan Yuejin, director of the E-house China Research and Development Institute.
More to follow…