China’s central bank backs Beijing’s property destocking plan as housing sales crawl
- Data provider CRIC estimates that 20 of the 30 cities it tracks are expected to take more than 18 months to reduce stockpiles
China’s central bank has backed the government’s plans to use public resources to absorb the nation’s unsold homes as it moves to remove an inventory overhang in the world’s largest property market, which a data provider said could take as long as 18 months to work through.
People’s Bank of China (PBOC) on Wednesday held a virtual meeting on the topic, on the heels of Beijing’s announcement last month of a 300-billion-yuan (US$41.5 billion) fund to help clear excess housing stock.
The meeting was attended by major national banks and top officials from provincial cities, who discussed follow-up measures on the fund, which is earmarked for repurchasing unsold homes nationwide.
Beijing’s efforts to accelerate the clearance of excess inventory and shore up the real estate market, which accounted for a quarter of the country’s economic growth at its peak, have gathered pace since the launch of the fund.
At least 10 major Chinese cities including Shanghai, Guangzhou, Shenzhen, and Hangzhou, have issued statements to encourage local state-owned enterprises to clear unsold home inventories.
Early indications were disappointing. Data from China Real Estate Information Corporation (CRIC) showed that only four out of 30 major cities showed signs of improvement in destocking trends in May compared with the previous month. CRIC said that 20 of the cities are expected to take more than 18 months to reduce stockpiles.