Real estate crisis: China wants to pump billions into the ailing housing market

China is helping the ailing real estate market with additional loans worth billions. By the end of the year, support for housing projects on the “white list” will be expanded to a total of up to four trillion yuan (around 517.4 billion euros), as Housing Minister Ni Hong said. The list, introduced by the government in January, includes projects and developers that are suitable for financing.

As of mid-October, loans totaling 2.23 trillion yuan had been approved, according to official figures. China will almost double its loan volume by the end of the year. The People’s Republic wants to ensure that unfinished projects are completed and the downward trend in the sector is stopped. “We can definitely win the battle to ensure the handover of housing,” Ni said. According to him, after three years of “adjustment”, the country’s real estate market has now bottomed out.

Government wants to restore trust

The pressure is on the banks and local governments to distribute the loans. On the markets, however, investors had hoped for more concrete steps from the central government in Beijing. It was only in September that China announced that it would lower interest rates for borrowers on housing loans. With this and other steps, the government tried to restore trust among consumers.

Since major property developers were no longer able to service their creditors and complete apartments that had already been purchased a few years ago, there has been uncertainty. The value of real estate, in which many Chinese people had invested their savings, fell. The crisis in the sector, which has been seen as a guarantee of growth for years, also contributed to the decline in consumer sentiment in China, as many people held on to their money. This is also a reason for the weak recovery of the world’s second largest economy after the corona pandemic.