Beijing: On Friday, May 17, China announced that local governments would purchase “some” apartments and vowed to deliver unfinished homes with vigor as part of a new set of steps to stabilize the property sector hit by the crisis.
Earlier in the day, new data revealed the fastest decline in new home prices in over nine years, underscoring the deteriorating situation of an industry that, at its height, contributed a fifth of the economy and is still a major growth inhibitor.
Local governments can purchase homes at “reasonable” prices, Vice Premier He Lifeng said during an online meeting with other authorities, given the failure of the previous two years’ waves of support measures to revive the real estate market.
He stated that the houses would be used to provide affordable housing, but he did not specify a timeframe or goal for the purchases or how they would be paid for.
In addition, he claimed that local governments, which are currently in debt by almost US$9 trillion, could buy back land that has been sold to developers and assured that they would “fight hard” to finish unfinished business.
The central bank also announced that it would further reduce the down payment and mortgage interest rates.
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