Jakarta — China’s cabinet on Friday approved the planning and construction guidelines for affordable housing at a meeting chaired by Premier Li Qiang.
This was reported by Xinhua News Agency with reference to Reuters on Tuesday (08/29/2023).
China’s real estate sector is in a deepening crisis with rising risks of default among some developers who are struggling to sell apartments and raise funds.
Xinhua did not provide details on the new cabinet guidelines, but quoted a cabinet statement saying the guidelines would boost investment and promote healthy development of the real estate market.
In addition, China’s central bank announced guidelines for easing home lending rules, which aims to boost loan applications and home purchases.
The People’s Bank of China said banks should treat those who do not own a home in their name at the time of purchase as first-time homebuyers, regardless of whether they previously used credit to purchase a home.
The central bank also said it would uphold the principle that a home is a place to live and not a vehicle for speculation.
In recent years, Beijing has been pushing for more affordable housing as high home prices in major cities are deterring many young buyers. The plan is becoming increasingly important amid a debt crisis in the real estate sector and weakening economic growth.
Last year, a spokesman for the Ministry of Housing and Urban and Rural Development said China would build 6.5 million new low-cost housing units in 40 major cities between 2021 and 2025.
However, along with falling property prices, official data showed that new home prices fell in July for the first time this year, highlighting the importance of bolder political support.
On Friday, the housing ministry, the central bank and the national financial regulator also jointly issued a mortgage policy easing notice to help revitalize the sector.
China’s housing market has been grappling with a deep debt crisis for the past two years, initially sparked by government action to curb rising debt.
The Cabinet on Friday also approved the 2023-2025 Pharmaceutical and Medical Device Industry Development Plan, while promising to expand the country’s ability to supply high-tech medicines and key technologies, Xinhua said.