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On October 10, China announced plans to boost credit for its struggling property market and renovate a million homes as part of new measures to support the sector and boost the economy. Housing Minister Ni Hong revealed an expansion of credit for white-list projects to four trillion yuan (USD 562 billion) by year-end, emphasizing the inclusion of eligible real estate projects. Despite a market rally fuelled by expectations of economic support, momentum declined due to a lack of concrete bailout figures. Analysts predict 4.9 percent growth for 2024, with Beijing remaining confident in reaching its five percent target despite ongoing economic challenges.
China announced on October 10 that it would increase the credit available to the struggling property market and assist in renovating a million homes as it unveiled another round of measures to support the sector and attempt to revive the economy. The struggling real estate sector had long represented about a quarter of the gross domestic product and had experienced remarkable growth for two decades, but a lengthy housing slump had severely impacted growth as the country's leadership aimed for a target of around five percent for 2024. Advertisement
At a briefing on October 10, Housing Minister Ni Hong announced that Beijing planned to expand the credit scale for white-list projects to four trillion yuan (USD 562 billion) by the year's end. The white-list scheme, which had been introduced earlier in the year, encouraged local authorities to identify housing projects in need of financial support and collaborate with banks to ensure these projects were completed.
Housing Minister Ni Hong stated that the urban real estate financing coordination mechanism should aim to include all eligible real estate projects in the white-list. He also mentioned that an additional one million rundown homes would be renovated, citing safety concerns and poor living conditions in urban villages. Ni highlighted that residents were eager for these improvements. He further noted that this initiative would help absorb the existing supply of commercial housing.
China's leadership had cautioned last month that the economy was facing "new problems," prompting officials to introduce a series of incentive measures aimed at reviving growth. These initiatives included several interest rate reductions, the easing of home-buying restrictions, and efforts to increase liquidity for banks to facilitate more lending.
However, a sharp market rally fuelled by expectations of significant economic support lost momentum as authorities withheld a concrete bailout figure and provided few details on their plans. In recent months, several major cities, including Chengdu, the capital of Sichuan province, and the northern port city of Tianjin, have also relaxed house-buying restrictions, with Chengdu being the latest this week.
China's latest announcement precedes the release of third-quarter growth data on October 11, anticipated to be the slowest of the year. Analysts surveyed by AFP forecast overall growth of 4.9 percent in 2024, a figure worse than last year, which marked the weakest performance in decades, excluding the COVID-19 period. Despite this, Beijing has expressed "full confidence" in achieving its five percent growth target.
In light of the ongoing challenges faced by the property sector, China's latest measures reflect its commitment to stabilizing the economy. By increasing credit and focusing on the renovation of failing homes, the government aims to restore confidence among investors and homeowners alike. However, the uncertainty surrounding specific bailout details has dampened market enthusiasm. As the country braces for potentially disappointing growth figures, the leadership's insistence on achieving its growth target underscores a determination to navigate these economic hurdles. The effectiveness of these initiatives will largely depend on timely implementation and responsiveness to market conditions in the coming months.
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