China: Further support for property market aims at credit provision to housing projects – UOB Group

China announced two new measures to stabilise its property market. The ‘whitelist’ property projects loan quota will be expanded to CNY4 tn by end2024 and it targets to renovate 1 million houses in major cities and compensate residents accordingly, UOB Group’s economist Ho Woei Chen.

China announces further support for property market

“The provision of more credit to viable projects aims to reduce risks in the real estate market and boost delivery of new homes but would otherwise have limited impact on incentivizing property investment or demand.”

“To recap, the government rolled out a property rescue package in mid-May and followed up in Sep with further support. The Ministry of Finance also said in its briefing over the weekend that local governments can use the money raised from their special bonds to buy unsold homes and turn them into subsidized housing.”

“We believe the government will continue to watch the property market development closely and is expected to step up support when needed but more to manage the downsizing rather than to reverse the trend. Looking ahead, market anticipates more details on the fiscal stimulus after the meeting of the Standing Committee of the National People’s Congress (NPC) in late-Oct, following the approval process.”