20 February 2019
The housing ministry has not commented on local government efforts to stir the property market. Photo: AFP
The housing ministry has not commented on local government efforts to stir the property market. Photo: AFP

Housing ministry stands by as local govts step in

The Ministry of Housing and Urban-Rural Development has been silent on efforts by local governments and the central bank to counter signs of weakness in the property market since late last year and won’t be unveiling any macro measures for the sector, the China Times reported Thursday.

But it will grant local governments more power to take action according to local conditions, one unnamed source said. The ministry will also put construction of government-subsidized public housing at the top of its agenda, with plans to build more than 7 million units this year.

The move reflects the housing ministry’s shift away from market intervention, the report said.

Chen Zhiwei, deputy chairman of the Beijing Real Estate Association, was quoted as saying that an increase in the public housing supply will definitely will dampen property prices.

The central bank asked commercial banks Monday to speed up the granting of home loans, especially for first-home buyers, and to set mortgage rates at reasonable levels, underlining its efforts to support the flagging property market as the economy cools.

But analysts have questioned the effectiveness on the so-called “window guidance”.

Zhang Hongwei, a senior analyst with property consultants TOSPUR, was quoted as saying that the effects will be limited this year unless the central bank eases monetary policy, such as cutting banks’ required reserve ratio.

Nie Mingsheng, honorary chairman of the real estate chamber of commerce under the All-China Federation of Industry and Commerce, agreed, saying tight liquidity is a key problem in the property market. Developers’ financing channels have narrowed and their financing costs have risen as property buyers’ lending costs have grown. If liquidity doesn’t improve, it will be hard for “market-saving” measures to bear fruit, Nie said.

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