China to pump billions into ailing housing market

China is to prop up its struggling property market with billions more in loans, the government announced on Thursday.

By the end of the year, support for "white-listed" residential construction projects is to be expanded to a total of up to 4 trillion yuan ($563 billion), Housing Minister Ni Hong said.

The list, introduced by the government in January, contains projects and developers that are eligible for financing. Official data reveals loans totalling 2.23 trillion yuan had been approved by mid-October. China is thus almost doubling the credit volume by the end of the year.

The People's Republic wants to ensure that unfinished projects are completed and that the downward trend in the sector is stopped. "We can definitely win the battle to ensure the delivery of homes," said Ni. He added that China's domestic property market has now bottomed out after three years of "adjustment."

The pressure is now on the banks and local governments to distribute the loans. Investors in the markets had hoped for more concrete steps from the central government in Beijing. It was only in September that China announced a cut in interest rates for home loan borrowers.

There's been uncertainty in China's property market for several years since major property developers failed to service their creditors and were unable to complete apartments that had already been purchased. The value of real estate in which many Chinese had invested their savings plummeted.

The crisis contributed to the decline in consumer sentiment in China, as many people held on to their money. This led to a weak recovery of the world's second-largest economy after the coronavirus pandemic.