China boosts funds for housing projects to support embattled sector

BEIJING: China will expand a “white list” of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan (US$562 billion), Minister of Housing and Urban-Rural Development Ni Hong said on Thursday (Oct 17).
Monetisation measures will also be undertaken for urbanisation projects, with a million villages to be included in such plans, Ni said at a press conference.
The pledges for more financing for cash-strapped developers and urban developments are part of a series of measures announced in recent weeks aimed at stabilising a sector that plunged into crisis in 2021, dragging on broader growth in the world’s second-largest economy.
“It can be said that the bottoming out of the property market has begun,” Ni told reporters.
In January, China announced a plan for a “white list” of projects that can receive financing to ensure that developers could complete construction and deliver homes to buyers. As of the end of the third quarter, banks had approved 5,392 such projects, with financing reaching nearly 1.4 trillion yuan.
Approved loans for the “white list” projects had risen to 2.23 trillion yuan as of Oct 16, Xiao Yuanqi, deputy director of the State Financial Regulatory Administration, said at the press conference.
On Saturday, finance ministry officials also announced measures to prop up the property sector, allowing local governments to use funds from special bonds to buy unsold homes and idle land.
In late September, the central bank announced measures including cuts in the minimum down payment ratio to 15 per cent for all buyers.
Interest rates on existing mortgages are expected to drop by an average half a percentage point, benefiting 50 million households and 150 million residents, Tao Ling, a deputy governor at the central bank, said at the same press conference.
The rate cuts helped households save 150 billion yuan, she said.
Since last year, China has implemented incremental policies to lift home buyer confidence amid concerns about persistently declining home prices, timely deliveries of homes by developers, and the status of their own jobs and incomes in a fragile economy.
In a September meeting, the politburo, a top decision-making body of the ruling Communist Party helmed by President Xi Jinping, called for further measures to stabilise the market.