China to boost credit for real estate market and renovate 1 million homes

China said on Thursday it would increase credit available to the struggling property market and help renovate a million homes, while unveiling a new round of measures to support the sector and try to revive the economy.

The declining real estate sector has long accounted for about a quarter of gross domestic product and has seen meteoric growth for two decades, but a years-long real estate crisis has dampened growth as the country’s leaders aim for a goal of around 5% for 2024.

At a press briefing on Thursday, Housing Minister Ni Hong proposed further aid, saying Beijing would “increase the credit scale of whitelisted projects to four trillion” yuan ($562 billion). ) by the end of the year.

The “whitelist” scheme, announced earlier this year, pushes local authorities to recommend housing projects for financial support and work with banks to ensure they are carried out.

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“The urban real estate financing coordination mechanism should strive to include all eligible real estate projects in the white list,” Ni said.

“A million additional dilapidated houses (…) will be renovated,” he added. “There are many safety hazards and poor living conditions in urban villages, and people are eager to renovate. »

The move, he said, “would help reduce the existing stock of commercial housing.”

China’s leaders warned last month that the economy was facing “new problems”, as officials unveiled a series of stimulus measures that represented one of the biggest measures to boost growth in years .

The measures include a series of interest rate cuts, easing restrictions on home buying and measures to free up liquidity so banks can lend more.

But the market’s meteoric recovery, driven by hopes of a major stimulus package, faltered as authorities refrained from providing a precise figure for the bailout or fleshing out any of the plans.

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A number of major cities have also eased restrictions on home purchases in recent months, including this week in Chengdu, the capital of southwest Sichuan province, and the northern port city of Tianjin. of the country.

The latest announcement comes as China prepares to release its third-quarter growth data on Friday, which is expected to be its slowest this year.

And analysts polled by AFP forecast overall growth of 4.9% in 2024, even worse than last year, which was the weakest in decades outside of Covid.

However, Beijing said it was “fully confident” in its ability to achieve its five percent target.

Source: AFP