New measures set to revive realty sector

China’s government has introduced fresh policy measures to revive its ailing real estate sector, focusing on expanded financing and demand stimulation. The 'white list' program, which grants credit access to eligible developers and projects, will now support up to 4 trillion yuan ($561.8 billion) in loans by year-end, double the current approvals of 2.23 trillion yuan. This initiative is designed to help troubled developers fulfill delivery commitments and restore buyer confidence, as noted by Ni Hong, minister of housing and urban-rural development. The government also announced plans to renovate 1 million additional urban villages or dilapidated homes, offering residents financial incentives to purchase new apartments. Local authorities will fund these projects through special bonds, accelerating implementation of high-priority initiatives. Analysts, including Yan Yuejin of E-House China R&D Institute, argue that these steps will address supply-demand imbalances and support the sector’s recovery. Ni Hong stated that the real estate market has shown broad stability since October, particularly in major cities, though sales declined 25% year-on-year through August 2024. Total commodity housing sales for 2024 are projected at 711 million square meters, down from 948 million in 2023. The new policies aim to reverse this trend by easing financing constraints and injecting demand through renovations. The measures follow earlier efforts to stabilize the sector, including local recommendations to financial institutions for 'white list' projects. Dong Ximiao, chief researcher at Merchants Union Consumer Finance, emphasized that the expanded financing scale will help resolve past hurdles in converting approvals into actual funding. Meanwhile, Wang Qing of Golden Credit Rating International highlighted the renovation program’s role in balancing housing supply and demand. Analysts agree the policies could bolster economic growth, as real estate remains a critical driver for China’s 5% annual GDP target. The focus on timely project deliveries and consumer incentives reflects the government’s urgency in reviving confidence amid ongoing market challenges.