SHANGHAI – China reiterated a stance that homes are for residents to live in, and not for speculation, keeping to its longstanding position even as a property crisis weighs on demand.
“We must adhere, to the very end, the belief that housing is for living in, not for speculation,” said China’s Housing and Urban-Rural Development Minister Ni Hong at a press briefing in Beijing on March 9.
“The government guarantees basic housing needs, and the market fulfils other diversified housing requirements and systems, establishing a market for both renting and buying.”
This clarification came after Premier Li Qiang’s government work report draft omitted the slogan “housing is for living in, not speculation” for the first time since 2019.
The phrase has consistently been used by officials since 2016, and became an important way for Beijing to signal its intention to cool a then-overheated market.
China’s property crisis reached another low as real estate developer China Vanke comes under pressure for repayments on private debt.
While the government proposed in a recent work report to treat real estate companies equally regardless of their ownership, investors remain concerned, sending a Bloomberg gauge of Chinese developer shares down since the start of the national congress.
While China’s property market still has “great potential”, Mr Ni acknowledged the current difficulty is related to issues with capital.
Developers who are severely insolvent and unable to operate should go bankrupt or restructure, he said.
Country Garden Holdings was recently confronted with a liquidation petition in Hong Kong, while China Evergrande Group was wound up in January.
Mr Ni also said the government will push for the sales of completed homes, and reform basic mechanisms for property fund raising and sales, without giving details.
Earlier in the week, former central bank governor Yi Gang suggested the central government or the People’s Bank of China insure about 30 billion yuan (S$5.63 billion) of pre-sale proceeds, which would enable developers to tap about one trillion yuan in liquidity.
Mr Ni also echoed the government’s work report, stating that the authorities will move faster to foster a new development model for real estate, including by building government-subsidised housing.
This is in line with President Xi Jinping’s mantra of “common prosperity” to narrow the wealth gap.
Responding to a question about China’s urban renewal efforts, Mr Ni said the authorities will renovate 50,000 older community areas in 2024. The government completed 2.6 trillion yuan worth of urban renovation investments in 2023, he added. BLOOMBERG
