China announced this Thursday that it will increase credit available for the real estate sector and provide support for the renovation of one million homes, as part of a series of measures aimed at boosting the economy.
The housing and construction sectors represent more than a quarter of the GDP of the world’s second economy, but since 2020 they have been affected by Beijing’s tightening of credit conditions for real estate developers, which has put of bankruptcy to some large construction companies. caused house prices to plummet.
Authorities still expect growth of “around 5%” this year, but analysts consider this goal to be optimistic, considering the numerous obstacles currently facing the world’s second-largest economy.
At a press conference in Beijing, Housing Minister Ni Hong announced that the authorities “will increase the credit scale of white-listed projects to 4 billion yuan” (517 billion euros) by the end of 2024.
The “white list” system, announced at the beginning of the year, is a mechanism through which municipalities recommend real estate projects to banks for priority financing.
Ni Hong added that “one million dilapidated houses, located in urban villages, will be renovated” thanks to the financial restructuring.
“Urban villages present many security risks and poor living conditions. “People really want to renew,” he explained.
The concept of urban villages in China consists of ancient villages, which have survived in areas that have been urbanized in recent decades.
Last month, Chinese leaders, including leader Xi Jinping, acknowledged new “problems” for the world’s second-largest economy and revealed one of the The largest stimulus packages in several years..
The measures include reductions in interest rates, particularly on loans for existing homes, and the easing of restrictions on home purchases.
At Thursday’s news conference, officials said rates on existing home loans “will drop on average about 0.5 percentage points” as part of the reductions.
This “will benefit 50 million families and 150 million people“said Tao Ling, deputy governor of China’s central bank.
Stimulating housing demand is one of the authorities’ priorities to ensure a sustainable recovery.
In recent weeks, some of the country’s major cities, such as Beijing, Shanghai (east), Chengdu (southwest) and Tianjin (north), have eased restrictions on property purchases.
Source: Observadora
