These and other measures announced Friday marked Beijing's latest efforts to address issues in the massive real estate sector.
The People's Bank of China will provide 300 billion yuan ($42.25 billion) to financial institutions to lend to local state-owned enterprises (SOEs) so they can buy unsold apartments that have already been built.
Also Friday, the PBOC removed a floor on mortgage interest rates, and lowered the minimum down payment ratio for first- and second-time home buyers.
BEIJING — Chinese authorities on Friday pledged new support for state-owned enterprises to enable them to buy unsold apartments, in an effort that could help developers get more funding to finish construction on pre-sold properties.
These and other measures announced Friday marked Beijing's latest efforts to address issues in the massive real estate sector.
"I think it is encouraging that the policy is taking a turn of direction trying to support the housing market," said Zhu Ning, a professor of finance at Tsinghua University and author of the book "China's Guaranteed Bubble."
People's Bank of China Deputy Governor Tao Ling told reporters at a briefing Friday the central bank would provide 300 billion yuan ($42.25 billion) to financial institutions to lend to local state-owned enterprises (SOEs) so they can buy unsold apartments that have already been built.
The central bank expects the support to release 500 billion yuan in financing for such purchases, which the SOEs could turn into affordable housing.
The real estate companies can then use funds earned from those sales to complete construction on other apartments, the central bank said.
As for unfinished, pre-sold properties, the National Financial Regulatory Administration Deputy Director Xiao Yuanqi told reporters that commercial banks have provided 935 billion yuan in loans to finish construction on whitelisted projects since the program was released in January.
"The government's purchase of housing inventory can inject more liquidity to developers, who could then have more resources for housing delivery," Larry Hu, chief economist at Macquarie, told CNBC. "Finally the government stepped in as the buyer of the last resort."
"At this stage, it's mainly SOEs and local governments to implement the policies, but their resources may be too limited to move the needle at the macro level," he said. "Later on, we might see more efforts from the central government."
Developers "that must go bankrupt should go bankrupt, while those that need to be restructured should be restructured," Dong Jianguo, deputy head of the ministry of Housing and Urban-Rural Development, told reporters in Mandarin, translated by CNBC. He said homebuyers' interests and rights should be prioritized, and those that violate the law should be punished.
Based on what? there's no discussion here of the housing prices being lowered, only of the government purchasing unsold units from real estate companies. At no point is there any indication that the government will provide those units to buyers at lower prices.
I think we’re all operating under the assumption that would be a communist government’s end goal
If it were communist the government would be providing housing to the people at no cost. There's no indication of that either.
Has this government actually taken any such action?
Shut the fuck up cracker
It's a communist party running and maintaining an imperfect and very real society. China's existence as a state, building towards socialism notably, has been defined by this required buildup because
emmiserated the shit out of China and it's people. All socialists have admitted that socialism is merely the goal, a society of pure working class and peasant control in both politics and the economy, but recognize that it will require a rich and advanced economy both to improve the lives of many and to allow them to participate in it's institutions as fully as socialism requires. Just because you're from a nation that doesn't even understand what a liberal is, let alone a communist, doesn't mean that the Communist Party of China (a communist party with more than 98 million members) is so naive.
If you're clearly so intelligent and able to dictate what the Chinese people should do you should focus on fixing the United States first, as it's currently committing a genocide. I think that takes far more priority than red bashing at the moment.
Chinese state taking a larger and larger role in the housing sector and various public affortable housing initiatives in various levels and models have been openly and officialy stated by the CPC as actions to be taken going forward. Most western coverages even of sales like the one we are talking about specificaly mention them being part of those policies
I have many friends who are Chinese and they're still salty that the price of housing was lowered because many Chinese people used housing as an investment in the past. Beyond all this heady discussion, that's the only real effect this has had on the vast majority of homeowners in China (who are themselves the vast majority of people)