(Reuters) – China is considering a plan to force local governments across the country to buy up millions of unsold homes, Bloomberg News reported on Wednesday, as a protracted real estate crisis weighs on the world's second-largest economy. Ta.
China's blue-chip CSI300 index rose 2% on the news.
The report added that the State Council is gathering feedback on the preliminary plan from various ministries and government agencies, citing people familiar with the matter.
According to the report, local state-owned companies were asked to help purchase unsold homes from struggling developers at deep discounts using loans provided by state-owned banks, and then It added that many of the homes would be converted into affordable housing.
Chinese officials are discussing the details and feasibility of the plan, and if the country's leaders decide to go ahead with it, it could take months to make a final decision, the report said.
China's real estate sector has been in a deep recession for many years. Since 2022, a wave of policy measures has failed to turn around the sector, which accounts for one-fifth of the country's gross domestic product (GDP) and remains a major drag on consumer spending and confidence.
Estimates vary widely, but analysts agree there are tens of millions of unfinished apartment units across China after the construction boom collapsed.
Banks have been reluctant to respond to repeated efforts by the Chinese government to shore up credit for the struggling sector, given the risk of a further rise in non-performing loans.
(Reporting by Surbhi Misra in Bengaluru; Editing by Himani Sarkar and Kim Cogill)
