• Chinese authorities have taken significant steps to address the crisis in the country’s property sector.
• The People’s Bank of China (PBOC) has announced a $ 300 billion yuan facility to support affordable housing.
• Local state-owned enterprises will use the funds to purchase unsold homes.

Chinese authorities have unveiled their most significant steps yet to address the crisis that has been dragging on the country’s property sector in recent years. The new measures include reducing the amount needed for a home buyer’s deposit and urging local authorities to purchase unsold properties.
Problems in China’s property market are significantly impacting the world’s second-largest economy, as the industry had been a key driver of growth until recently.

The People’s Bank of China (PBOC) announced it would establish a 300-billion-yuan ($41.5 billion; £32.8 billion) facility to support affordable housing.

At a news briefing, Tao Ling, a deputy governor at the central bank, stated that the money would aim to support local state-owned enterprises in purchasing unsold homes.

Earlier, Vice Premier He Lifeng informed officials that local governments can buy properties at “reasonable prices” and sell them as affordable housing, as reported by the state-run Xinhua News Agency.

The country’s central bank also effectively eliminated the minimum mortgage rate and reduced the minimum down payment for first-home buyers from 20% to 15%. Additionally, the minimum deposit for second homes was lowered from 30% to 25%.

Figures released earlier on Friday revealed that new home prices had declined for a tenth consecutive month in April. The 0.6% month-on-month decrease marked the sharpest drop since November 2014.

Separately on Friday, a struggling Chinese developer, Country Garden, had a hearing in a Hong Kong court regarding its potential liquidation adjourned to 11 June.

Since 2021, authorities have introduced measures to curb the amount big real estate companies could borrow, causing China’s property developers to face a major financial squeeze.

Since then, several large property developers have defaulted on their debts.

In January, a court in Hong Kong ordered Evergrande, the world’s most indebted property developer, to be liquidated.

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