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China Injects Billions to Stabilize Troubled Property Market

China Injects Billions to Stabilize
Getty Getty
China Injects Billions to Stabilize
Getty Getty

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China Injects Billions to Stabilize:  In response to the continuing crisis in the country’s real estate market, the Chinese government has taken substantial action. Stabilizing a market that was a key economic driver until recently is the goal of this intervention.

 The reduced homebuyer deposits and the program to incentivize local governments to buy unsold properties are not just important aspects of these new policies, but also key to understanding the global influence of China’s real estate market. The slowdown in China’s real estate market, which is the world’s number two economy, has a major impact globally, making these measures essential.

 The People’s Bank of China (PBOC) has announced a 300 billion yuan ($41.5 billion; £32.8 billion) fund for affordable housing. This fund, as explained by Deputy Governor Tao Ling of the Central Bank during a news briefing, will assist local state-owned firms in purchasing unsold dwellings, thereby contributing to the government’s efforts to stabilize the real estate market.

 Vice Premier He Lifeng, as reported by the state-run Xinhua News Agency, has outlined a strategy for local governments to legally acquire assets at low costs and resell them as affordable housing. However, the report did not provide specific details about the number of properties to be purchased or the duration of this initiative.

 In a significant policy shift, the central bank has reduced the minimum down payment for first-time homebuyers from 20% to 15% and eliminated the minimum mortgage rate. This change is expected to stimulate the real estate market by making it easier for individuals to purchase homes.

 New home prices have been declining steadily, according to recent data, and April was the tenth month in a row that prices have fallen. This is the steepest monthly decline since November 2014, at 0.6%.

 Meanwhile, on June 11, a court hearing in Hong Kong was scheduled for the financially troubled Chinese developer Country Garden to discuss its possible liquidation.

 Since the Chinese government adopted measures to restrict the borrowing capabilities of large real estate enterprises in 2021, the country’s property developers have been under immense financial pressure. This legislative change has led to several major real estate developers going into default, including the world’s most indebted real estate developer, Evergrande, which was ordered to be liquidated in January by a court in Hong Kong. These challenges highlight the gravity of the situation for Chinese real estate developers.


China is determined to stabilize its property sector, an essential part of its economic framework, and these extensive actions show that commitment. As the nation works towards economic recovery and stability, the effects of these measures will be carefully observed.

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