A China tenta evitar uma crise exponencial no mercado imobiliário: o Estado tapa o buraco gigantesco

 China’s Real Estate Headache

Foreign Policy, May 18, 20 

Residential buildings are under construction by Chinese real estate developer Vanke in Hangzhou, China, on May 9.AFP via Getty Images

Beijing unveiled a nationwide plan on Friday to try to stabilize the country’s floundering property sector. China’s central bank announced that it will provide nearly $42 billion in cheap loans to help local state-owned entities purchase unsold property to turn into affordable housing. Local governments in several cities have already tested this approach, but Friday’s announcement will be the first time such a program is tried on the national level.

This is “a significant historic moment” for the market, China’s state-run real estate newspaper wrote on Friday, though Beijing gave no timeline for the initiative. The plan also slashed requirements on down payments for first- and second-time homebuyers in addition to removing a floor on nationwide mortgage interest rates at a time when the average rate was already at a record low.

These measures signal “the beginning of the end of China’s housing crisis,” said Ting Lu, the chief China economist at Nomura investment bank.

For years, Beijing’s real estate sector has buckled under heavy borrowing and overbuilding. The number of unsold homes in China accounted for more than 8 billion square feet as of March, China’s National Bureau of Statistics reported, and new home prices across 70 cities hit a record-breaking decline in April, falling 3.5 percent last month compared to that time a year ago. Around 500,000 peoplehave lost their jobs since 2021 due to the crisis.

The Chinese government first intervened in 2020, but its initial efforts didn’t stop major corporations from crumbling. In late 2021, real estate giant China Evergrande defaulted, leaving behind hundreds of thousands of unfinished homes and a debt worth hundreds of billions of dollars. A Hong Kong court ordered the group to be liquidated in January of this year. On Friday, major real estate company Country Garden began the first hearing of its own liquidation case.

At its peak, China’s real estate sector accounted for a fifth of the nation’s total GDP, but now, the property crisis has caused local governments to rack up $15 trillion in debt. Last year, Beijing instituted a series of measures that reduced interest rates and tweaked purchasing rules, and this year, the government set an overall growth target of 5 percent. But some economists worry these initiatives may not address long-term issues.

“The biggest problem is whether the government purchase program will induce private sector demand,” said Raymond Yeung, the chief China economist at ANZ. “Clearing inventory will increase cashflow to developers and help their financial stability, but it does not address private sector confidence.”