Despite the fact that more than 200 communities have taken measures to increase demand by giving subsidies, group-buying discounts, reduced down payments, and mortgage interest rate reductions, homebuyers have been wary.
Chinese communities purchase property to reduce a large housing stock
According to a state-owned publication, local governments in China have begun purchasing unsold homes in an effort to reduce the country’s massive unsold housing inventory. This is a new strategy after a number of stimulus property programs failed to promote demand.
China’s property market has continued to collapse in recent months, with prices, sales, and investment all falling in August. Prolonged COVID-19 limitations and a nationwide mortgage boycott have further clouded the outlook.
Despite the fact that more than 200 communities have taken measures to increase demand by giving subsidies, group-buying discounts, reduced down payments, and mortgage interest rate reductions, homebuyers have been wary.
According to a Thursday article by the Securities Times, Suzhou, a city in eastern China, plans to purchase around 10,000 residential units in its 10 districts.
In September, the floor area of homes sold in Suzhou, as measured by a private survey, increased by 126.88% month-over-month. According to an industry expert quoted by the publication, city-owned properties might contribute to the surge.
Other Chinese cities have taken such actions. A corporation run by the city of Jinan in the east will purchase 3,000 homes from developers, while Handan in the north will do the same in order to settle displaced citizens in urban redevelopment projects.
Analysts told the newspaper that the measures might assist reduce house inventory and boost morale, but a long-term increase in the property market will require purchaser trust.