Chinese policymakers are likely to roll out more housing stimulus over the next two months as the existing support package appears insufficient to stem declines in home prices, notes Alex Loo, FX and Macro Strategist at TDS.
More incentives for housing in the next 2 months
“The housing downturn has hit consumer confidence and reduced real estate investment, which is a drag on GDP growth this year and next. Mortgage refinancing is a one-time solution and will do little to revive demand. Instead, supply-side policies may work better.”
“We expect the PBoC to increase the quota of its affordable housing relending facility to CNY1 trillion (previous: CNY300 billion) and provide 100% of the loan amount (previous: 60%) next month. We also anticipate that local governments will be allowed to use the proceeds from their special local bonds to purchase unsold housing as early as this month.”
“The ‘bazooka move’ for the real estate sector would be the establishment of a property stabilization fund, but we do not foresee this happening as the central government has been remarkably cautious in making major policy moves over the past 3 years.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
