China Regulators To Discuss Property Aid With Banks Friday

(MENAFN- Live Mint) " China's government
plans to hold a meeting with key officials on Friday morning to discuss the property market
, including a proposal to clear excess housing
inventory, according to people with knowledge of the matter.
Senior officials from the housing
ministry, financial
regulators, local government
s and state banks will attend the State Council meeting by video
conference, the people said, asking not to be identified because the matter is private.
The breadth of invitees from across the government
and the financial
sector adds to signs that Chinese leaders are prioritizing efforts to end a property market
slump that's weighing on the world's second-largest economy. Shares of Chinese developers jumped on Thursday after Bloomberg reported that China is considering a proposal to have local government
s buy millions of unsold homes. The State Council - China's cabinet - is seeking to collect feedback from relevant parties by the end of this month and finalize a draft plan in June, the people added. The housing
ministry didn't respond to a request for comment.
Senior officials from the PBOC, National Financial Regulatory Administration, Ministry
of Housing and Urban-Rural Development and Ministry
of Natural Resources will attend a briefing on Friday afternoon regarding the measures to ensure home delivery, according to a statement from the central bank. Authorities will likely announce new policy measures to tackle the country's persistent real estate crisis at a meeting scheduled for Friday morning, Caixin reported, citing unidentified sources. Officials will discuss ways to expand the so-called white-list of supported developments to include previously disqualified housing
projects, according to Caixin. Bloomberg reported on Wednesday that local state-owned enterprises would be asked to help purchase inventory from distressed developers at steep discounts using loans provided by state banks. Many of the properties would then be converted into affordable housing
A Bloomberg gauge of Chinese real estate stocks rose as much as 14% on Thursday, with Sino-Ocean Group Holding Ltd. and China Vanke Co. among the biggest gainers. The index has jumped more than 50% since mid-April on optimism that policymakers will take more steps to revive the market
Among other recent measures, several large cities have removed restrictions on home purchases to rekindle demand. Homebuyers remain concerned about prices, job security and the ability of cash-strapped developers to deliver apartments. If authorities proceed with the plan to reduce inventories, it would mark a new phase in the government
's campaign to address the biggest drag on economic growth. China's home sales plummeted about 47% in the first fourth months and unsold housing
inventory is hovering at an eight-year high, exacerbating a meltdown that threatens to put about 5 million people at risk of unemployment or reduced incomes.
China might need to spend at least 1 trillion yuan to buy up unsold homes, Bloomberg Intelligence credit analysts Andrew Chan and Daniel Fan estimated.“Although several factors may affect the execution of this measure, any new policy is likely to be positive,” they wrote in a note.
Enlisting local government
s to reduce the housing
glut could further exacerbate their debt level, which has soared to 56% of gross domestic product as of last year. Banks would also be under pressure as their balance sheets have already been eroded by rising bad loans and narrowing margins.
This article was generated from an automated news agency feed without modifications to text.


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