China yesterday said that it would boost credit available for unfinished housing projects to more than US$500 billion as it unveiled another round of measures to shore up the sector and try to reignite the economy.
The real-estate sector has long accounted for about one-quarter of GDP and experienced dazzling growth for two decades, but a years-long housing slump has battered growth.
Chinese Minister of Housing and Urban-Rural Development Ni Hong (倪虹) at a news conference offered fresh help, saying Beijing would “increase the credit scale of white-list projects to 4 trillion” yuan (US$562 billion) by the end of the year, up from more than 2 trillion yuan.
Photo: Reuters
The “white list” scheme, announced earlier this year, pushes local authorities to recommend housing projects for financial support and work with banks to ensure their completion.
“The urban real-estate financing coordination mechanism should strive to include all eligible real-estate projects in the white list,” Ni said. “An additional 1 million worn-out homes ... will be renovated.”
The move would “be conducive to absorbing the existing stock of commercial housing,” he said.
China’s leadership last month unveiled a raft of stimulus in one of the biggest drives to boost growth for years. Among the measures were a string of interest rate cuts, the loosening of restrictions on buying homes and moves to free up cash for banks to lend more.
Beijing yesterday said it estimated that “existing mortgage rates will fall by an average of about 0.5 percentage points” under those cuts.
That would “save 150 billion yuan in interest expenditure overall, benefiting 50 million families and 150 million residents,” People’s Bank of China Deputy Governor Tao Ling (陶玲) said.
Several major cities have also eased restrictions on buying homes — most recently in Chengdu and the northern port city of Tianjin.
Stocks in Shanghai and Hong Kong slipped yesterday as traders shrugged at Beijing’s latest plan to boost the nation’s troubled property sector, which came up short of expectations.
“They’re still trying to talk the talk, with more noise about stabilizing the property market,” SPI Asset Management managing partner Stephen Innes said. “As the briefing rolled on, it was clear: traders were not thrilled.”
“Let’s be honest, though — China’s property mess isn’t something that can be patched up with a few speeches and half-baked measures,” he said.
Hong Kong’s Hang Seng Index closed down 1.0 percent at 20,079.10, while the Shanghai Composite Index was down 1.1 percent at 3,169.38.
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