China tightens rules on selling unfinished homes to lift sector
Chinese officials tightened the rules for selling unfinished homes on Friday as they try to lift the country’s property market out of a years-long slump that has weighed on consumption. Half-built apartment buildings dot cities across China, relics of a property boom that came to a halt when the government clamped down on excessive borrowing […]
Chinese officials recently tightened regulations surrounding the sale of unfinished homes in an effort to rejuvenate the country's struggling property market, which has been plagued by an extended slump. This move comes as developers are grappling with substantial debts due to a property boom that ended in 2020 following government restrictions on excessive borrowing and speculation. The issue has left buyers with significant financial burdens, as they invested large sums into properties that were never completed.
The directives were released in a joint statement by China's National Financial Regulatory Administration, Beijing's housing and natural resource ministries, as well as the country's central bank. New lending guidelines were also announced, raising the maximum length for personal housing loans to 40 years from the previous 30-year limit.
Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management, praised these policies as a significant step in the right direction, stating that the extension of mortgage loan lengths will alleviate the debt burden for homebuyers.
According to Zhang, the weak domestic demand in China can largely be attributed to the troubled property sector. The new housing policies demonstrate that Chinese officials recognize the pressing need to stabilize the market and boost consumption, which has been adversely affected by the ongoing repercussions of the Covid-19 pandemic.
Written by urgent.news from Hong Kong Free Press's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
