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China's economic recovery
EconomyChina Economy

China moves to stabilise property sector with ‘stronger-than-expected’ policy package

The measures aim to shift China’s vast property sector away from a presales model, as Beijing strives to stabilise market downturn

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A man walks on an overpass near residential buildings in Beijing. Photo: Reuters
Huizhao Huangin Berlin,Xinyi Wuin BeijingandXiaofei Xuin Paris
Beijing has unveiled a package of measures to shift home sales in China’s vast property market away from a presales model, in a stronger-than-expected push to stabilise a property downturn that has weighed on consumer demand for years.

A notice released on Friday laid out reforms to China’s home sales system, telling local governments to prioritise completed-home sales. It was jointly issued by the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources and the National Financial Regulatory Administration (NFRA).

Two other documents released the same day dealt with property sector financing. The central bank and the NFRA set out new rules on development loans, while the securities regulator said it would support listed developers in mergers and restructurings.

“The policies announced today are stronger than what the market expected,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

China’s sluggish domestic demand was “to a large extent” caused by the troubled property sector, he said, adding that the measures suggested policymakers recognised the urgent need to stabilise the market.

The housing notice called for the “vigorous and orderly” roll-out of completed-home sales. Projects on newly transferred land, as well as those on land already sold but without a construction planning permit, should prioritise the completed-home sales model, it said. Projects already holding permits were also encouraged to adopt it.

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