Beijing: China’s government hinted at further support for the real estate sector, with a top policy maker describing it as a “pillar” of the world’s second-largest economy.
Vice Premier Liu He said new measures are being considered to improve the financial condition of the industry and boost confidence, according to a Xinhua report posted on the central government’s website. Liu also quashed concerns that weak housing demand may lead to a long-term slump, saying China is still on a course of “relatively quick urbanization.”
“Policy makers are very confident the nation’s economy will see overall improvement next year,” the Xinhua report quoted Liu as saying at the China-EU business leader dialogue Thursday. “There’s sufficient housing demand to support steady growth of the property market.”
China's property slump
An unprecedented real estate slump has prompted authorities to step up support for the industry in recent weeks, triggering a rally in developer stocks and bonds.
A Bloomberg Intelligence gauge of builder shares jumped as much as 3.6 per cent on Friday, taking gains since the end of October to 77 per cent.
Chinese junk bonds, predominately sold by property developers, were largely unchanged, according to traders. A Bloomberg index tracking the sector is poised to rise for the sixth straight week, the longest streak since November 2020.
Top leaders have signaled the focus in 2023 will be on economic growth, after the real estate slump and Covid restrictions slowed output this year.
Authorities may further soften their stance on property policies at this week’s annual Central Economic Work Conference, Bloomberg reported last week. Recent efforts have focused on easing developers’ access to financing through bond and equity issuance as well as bank lending.
Demand from homebuyers remains weak, with government figures this week showing home prices slid for a 15th month and sales fell at a quicker pace in November.
In another sign of a shift in rhetoric, central bank Governor Yi Gang said last month that the property sector played a “significant” role for the economy.