China plans to nearly double its credit support for select housing projects to $562 billion as part of its efforts to revive the property sector and stimulate the economy.
The whitelist, introduced in January, includes projects and developers eligible for additional financing from local and state-owned banks to help complete unfinished developments.
According to Housing Minister Ni Hong, loans approved so far this year for these whitelisted projects total Rmb 2.2 million. He announced the expansion of support during a press conference in Beijing on Thursday, stating that the new funds are expected to be distributed by the end of the year to enable developers to complete construction. “We can definitely win this battle to ensure the delivery of housing,” Ni said.
This expansion of credit support is the latest effort by Beijing to restore confidence in China’s economy. A prolonged property sector slowdown, coupled with weak consumer demand, has led to increased calls for fiscal stimulus.
In September, authorities introduced measures to support the sector, including lowering borrowing costs and easing rules on second-home purchases. These plans, alongside initiatives to stabilize the stock market, have renewed hopes for significant government intervention.
The government, which initially stepped in during 2020 to reduce leverage in the property sector, has so far avoided direct stimulus, opting instead to encourage China’s state-owned banks to lend more. Previous measures include the announcement of bank lending limits in November 2022 and a plan in May to mobilize state-owned enterprises to purchase unsold homes.
Jeff Zhang, an analyst at Morningstar, said he expects “an acceleration in implementation, with more distressed developers receiving funding to complete homes, which will help support homebuyer confidence.”
While China’s housing market has historically been dominated by pre-sale purchases, buyers have shifted towards existing properties this year due to concerns about developers’ financial health.
On Thursday, the housing minister noted that viewings and purchases of new homes had shown a “significant increase” since the end of September and that transaction volumes in the secondary market had “continued to rise.”
According to Reuters calculations, new home prices in major cities fell by 5.3 percent in August, marking the fastest decline in nine years.
