More Chinese Cities Move to Buy Up Housing Inventories

By Jiahui Huang

Two more Chinese cities have unveiled plans to buy up unsold, unfinished or old housing, coming as Beijing shifts its focus to absorbing excess apartment supply as a way to resolve the country's ongoing property crisis.

Nanjing, the capital of Jiangsu Province, on Saturday said it would help renovate or buy housing inventories and turn them into public housing.

Foshan, a mid-sized city in Guangdong Province, on Monday said it would encourage local state-owned enterprises to buy up and complete unfinished housing projects, and to participate in a trade-in program by buying old apartments and turning them into public housing. Foshan said it would make subsidies available for residents selling their apartments to move into new housing.

The moves, which follow similar plans by a half dozen cities in recent weeks, come after senior Chinese policymakers last month expressed concern about unsold and unfinished housing projects across the country, and flagged a desire to create more public housing.

Comments at the meeting raised speculation that central and local governments could allocate funding toward digesting a glut of unused and unfinished housing inventory across the country, the product of factors including tightened liquidity conditions for developers and lackluster consumption in the world's second largest economy.

Bruce Pang, a JLL chief economist for Greater China, said the new policies would be a "win-win" for developers, the government and residents. "The policy push could give the housing sector a leg up for accelerating destocking and provide more affordable housing," he said.

ANZ Research analyst Zhaopeng Xing said he expected more cities to follow with similar measures, especially those that rely heavily on the property sector for growth, and those with relatively high inventories.

Write to Jiahui Huang at [e-mail]

(END) Dow Jones Newswires

05-13-24 0547ET