Chinese Builder Agile Defaults for First Time on Dollar Bonds – BNN Bloomberg
China has announced significant measures to support its struggling property sector, injecting 1 trillion yuan ($138 billion) in extra funding. The central bank will facilitate 300 billion yuan in relending loans to support state-owned enterprises in purchasing unsold homes, anticipating an additional 500 billion yuan in bank lending. Measures include cutting down-payment ratios to 15% for first homes and 25% for second homes, and removing floor interest rates for mortgages. Local governments can buy unsold homes for affordable housing and repurchase land sold to developers.
The steps aim to stabilize a sector that accounts for roughly 20% of China’s economy. Recent actions include reducing the five-year loan prime rate by 25 basis points, easing home purchase restrictions in major cities, and implementing a “swap old for new” apartment scheme in over 50 cities. Analysts see these efforts as positive but question their potential impact on clearing inventory.
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