China’s property market, which once accounted for a quarter of the nation’s economy, has faced challenges since mid-2021 as developers struggle with debt. Authorities have implemented several measures since 2023 to stabilise the sector. These include ending the “three red lines” policy on debt ratios, which initially triggered the crisis. Banks can also extend loans for projects on a government-approved whitelist.
China’s securities regulator has introduced a pilot program for commercial real estate investment trust funds (REITs). Major cities like Shanghai and Beijing have relaxed home purchase restrictions for local residents in non-central districts. Additionally, the country aims to expand its “project whitelist” to 4 trillion yuan by the end of the year. Several cities have lowered minimum down payment ratios for first-time and second home buyers and eased purchase restrictions for non-local buyers.
The central bank unveiled a stimulus package, including reducing average interest rates for existing mortgages and lowering minimum down payment requirements. A 300 billion yuan relending program aims to facilitate 500 billion yuan in loans for local government-controlled firms to repurpose empty homes into affordable housing. The central bank has also cut down payment ratios and abolished floor levels on interest rates for mortgages. Furthermore, over 50 cities announced a “swap old for new” apartment scheme. Other measures included cuts to the five-year loan prime rate and benchmark lending rate, as well as easing borrowing rules for homebuyers.
