Evergrande crisis: Harbin in northeastern China readies subsidies, eases presale restrictions as housing market scrambles for stability

Name: Stunning ice and snow sculptures emerge at China’s Harbin festival
Uploaded: 2021-10-12T23:30:19.000Z
Duration: 1 min 33 s
Description: Stunning ice and snow sculptures emerge at China’s Harbin festival

Harbin is providing subsidies of up to 100,000 yuan (US$15,497) for homebuyers under 35

Developers with good credit profiles are being encouraged to re-embark on presale activity sooner than allowed earlier

Reading Time:3 minutes

Why you can trust SCMP

Harbin in China’s northeastern Heilongjiang province. Beijing and local governments will focus on stabilising the real estate market, according to one analyst. This means that cities with sharp home price increases will continue to see cooling measures. Photo: Xinhua

Pearl Liu

Published: 7:30am, 13 Oct 2021

Harbin, in China’s northeastern Heilongjiang province, is providing subsidies of up to 100,000 yuan (US$15,497) for homebuyers under 35.

The city, a provincial capital, said it would also encourage developers with good credit profiles to re-embark on presale activity sooner than allowed earlier. Such companies can now apply for presale permits for each block, as long as work on one floor of a tower higher than eight storeys or two floors of a tower less than eight storeys has been completed. Earlier, its government said in 2019 that presale permits could can only be approved when two-thirds of a block had been fully completed.

“Housing in some cities has gone from overheated to too cold. Such favourable housing policies can help boost the housing market,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.

01:33

Stunning ice and snow sculptures emerge at China’s Harbin festival

The change of heart in Harbin, which was announced over the weekend, comes in response to the crisis at China Evergrande Group, the country’s largest developer by sales as well as its most indebted home builder. Evergrande’s struggles are weighing on sentiment, and other big developers have reported a plunge in their sales.

For instance, Country Garden Group, China’s second biggest developer by sales, reported that its contracted homes sales in September had declined by about 20 per cent year on year to 45.66 billion yuan. China Vanke, the third largest home builder, sold 36.11 billion yuan worth of homes last month, only two-thirds of the level seen in 2020.

“Stabilisation is important. We all know that an overly hot market will lead to runaway home prices, but now we are seeing a new problem emerging – a cold housing market in which property developers might face financial risk yet again,” Yan said. “We will see more cities [easing restrictions], especially noncore second-tier cities such as Harbin, as well as smaller ones,” he added.