China will reduce or stop issuing land for new residential housing projects in areas where there is a supply glut, the latest in a series of measures aimed at clearing a property overhang weighing on the economy. China’s land ministry will not release vacant land to commercial property developers in cities and other areas where there are large levels of unsold inventory, state television reported on Sunday, citing a ministry meeting. The China Central Television (CCTV) broadcast said Land minister Jiang Daming plans to reward cities that effectively reduce their inventories by giving them permission to make new land allocations. China has announced a string of measures designed to boost the housing market, a crucial driver of the economy. Real estate investment affects more than 40 other sectors in China, from cement to furniture. The finance ministry said on February 19 that it will lower transaction taxes for second-time home buyers and some first home buyers in many cities. It followed a February 2 announcement of a further reduction in the minimum down payment required for first- and second-time home buyers in most cities. Minimum down payments had previously been cut in September. Last week, China’s Central bank raised the interest rate for deposits to its housing provident fund to allow more proceeds for depositors. The rate rose to 1.5 per cent from Sunday , the People’s Bank of China said in a statement. The prior rate was 0.35 per cent or 1.1 per cent, depending on when the deposits were placed. The fund is a saving scheme that lets employees and employers set aside a portion of wages that can be used as mortgage deposits. The land ministry also said on Sunday that it will increase land allocations in cities that have allowed migrant workers to purchase urban homes, CCTV reported, referring to a separate measure designed to help tackle oversupply. A report released by Fitch Ratings earlier this month said land sales represented around 27 per cent of local and regional governments’ aggregated revenue in 2015, and played a critical role in funding Chinese local and regional governments’ local infrastructure projects. Capital revenue has funded a significant part of capital expenditure, so a decline in this could either result in a reduction of capex or in higher deficits. China had 718 million square metres of unsold commercial and residential housing space at the end of 2015, the National Bureau of Statistics reported on January 19, a 15.6 per cent increase from a year earlier. Growth in property investment eased to 1 per cent in 2015, the slowest rate in nearly seven years, even as national sales improved, government data showed.