China's local authorities are encouraging state-owned enterprises to buy back newly completed housing to bolster the recovery of local real estate markets, and some local governments themselves have also snapped up properties. The local government in Suzhou, Jiangsu province, plans to buy back about 10,000 units of new housing. Multiple cities and regions have encouraged SOEs to buy housing in bulk, including Zhengzhou in Henan province, Jinan in Shandong province, and many other cities. The effects have gradually showed up in sales. In September, 610,000 square meters of residential homes changed hands in Zhengzhou, an increase of 71% month-on-month, while the transaction area for Jinan city reached 590,000 meters, up 2% from the previous month.
Altay prefecture in Xinjiang is another example. It announced 15 measures on September 27 to promote the healthy development of the local housing market, which encouraged SOEs to acquire housing projects. It also encouraged developers to put their inventories of commercial housing into the subsidized rental housing market. Yan Yuejin, Research Director at Shanghai-based E-house China R&D Institute, told the Global Times that the practice will have a comprehensive effect in revitalizing the property market.
Many cities adopted “buying back residential housing projects” as a policy tool in 2022, turning them into public rental housing, Yan said. The practice isn't the same as encouraging SOEs to directly buy new housing in groups, so it is important to prevent misunderstandings about the policy, the Global Times reports.
Banks in several Chinese cities have made further cuts to mortgage rates for first-time home buyers to below 4%. Industry experts said that the market will see a faster recovery as pro-growth government measures start to take effect. The lowest rate hits 3.7%. “The housing market is worth looking forward to, especially in the next year,” Song Ding, Research Fellow at the Shenzhen-based China Development Institute, told the Global Times.