(Reuters) - China is considering a plan to have local governments across the country buy millions of unsold homes, Bloomberg News reported on Wednesday, as a protracted property crisis weighs heavily on the world's second-largest economy.
China's blue-chip CSI 300 index rose 2% following the report.
The State Council is gathering feedback on the preliminary plan from various provinces and government bodies, the report added, citing people familiar with the matter.
Local state-owned enterprises would be asked to help purchase unsold homes from distressed developers at steep discounts using loans provided by state banks, according to the report, adding that many of these homes would then be converted into affordable housing.
Officials in China are debating the plan's details and feasibility, and it could take months for it to be finalised, if the country's leaders decide to go ahead, the report said.
China's property sector has been in a deep slump for years. Since 2022, waves of policy measures have failed to turn around the sector that represents a fifth of the country's gross domestic product (GDP) and remains a major drag on consumer spending and confidence.
Estimates vary widely, but analysts agree there are tens of millions of uncompleted apartments across China after a building boom turned to bust.
Banks have been reluctant to heed Beijing's repeated nudges to bolster credit to the embattled sector given the risks of more bad loans.
(Reporting by Surbhi Misra in Bengaluru; Editing by Himani Sarkar and Kim Coghill)
