ICYMI: China is considering a new funding option for local governments to buy unsold homes

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ICYMI: China is considering a new funding option for local governments to buy unsold homes

Via Bloomberg overnight was the report on moves to further prop up, or try to, China's troubled property sector.

While Bloomberg is gated, the basic gist is that China is considering a new strategy to support its struggling real estate market by allowing local governments to use special bonds to purchase unsold homes.

• Such bonds are typically reserved for projects like infrastructure and environmental initiatives.
• Local governments have already used over half of this year's 3.9 trillion yuan ($546 billion) bond quota, and it's uncertain how much of the remaining funds might be redirected toward buying homes if this plan is approved.
  

This proposal highlights the increasing urgency among Chinese policymakers to address the ongoing real estate crisis. However, it may face similar challenges as previous rescue efforts, which have seen limited success. For instance, only about 8% of the 580 billion yuan from existing rescue funds has been utilized, partly due to the low returns from converting unsold homes into affordable housing.

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: ICYMI: China is considering a new funding option for local governments to buy unsold homes

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