BEIJING (Reuters) -China will expand a “white list” of housing projects eligible for financing and increase bank loans for such developments to 4 trillion yuan ($562 billion), Minister of Housing and Urban-Rural Development Ni Hong said on Thursday .
The redevelopment of cities will also gain momentum, with one million “urban villages” included in such plans, Ni said at a news conference, adding that people being resettled will help absorb existing housing stock.
The pledges for more funding for developers and cash-strapped urban redevelopments are part of a series of measures announced in recent weeks aimed at stabilizing a sector that entered crisis in 2021, hampering broader growth in the the world’s second largest economy was slowed down.
“You can say that the bottom of the real estate market has begun,” Ni told reporters.
In January, China announced a plan for a “white list” of projects that can receive financing to ensure developers can complete construction and deliver homes to buyers. By this summer, banks had approved 5,392 such projects, financing 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 news conference.
On Saturday, Finance Ministry officials also announced measures to support the real estate sector, allowing local governments to use funds from special bonds to buy unsold houses and vacant land.
At the end of September, the central bank announced measures including a reduction in the minimum down payment ratio to 15% for all buyers.
Interest rates on existing mortgages are expected to fall by an average of half a percentage point, benefiting 50 million households and 150 million residents, Tao Ling, deputy governor of the central bank, said at the same news conference.
The interest rate cuts have helped households save 150 billion yuan, she said.
Since last year, China has gradually introduced policies to boost homebuyer confidence amid concerns about continued falling housing prices, on-time delivery of homes by developers and the status of their own jobs and incomes in a fragile economy.
At a meeting in September, the politburo, a top decision-making body of the ruling Communist Party led by President Xi Jinping, called for further measures to stabilize the market.
($1 = 7.1161 Chinese Yuan Renminbi)
(Reporting by Joe Cash and Liangping Gao; Writing by Ryan Woo; Editing by Christian Schmollinger and Shri Navaratnam)
