Foreign Property News | Posted by Hnin Ei Khin
BEIJING (Reuters) - China has invested 990 billion yuan ($143.63 billion) for a massive urban redevelopment project in the first seven months of 2018, the housing ministry said on Thursday.
China’s central bank has injected hundreds of billions of dollars into such shantytown redevelopment projects (SRP) through the Pledged Supplementary Lending (PSL) programme, which has been largely used for cash compensation to residents whose homes are demolished.
The policy helped boost home sales and prices in smaller cities that struggled for years with a glut of unsold homes, playing a key role in reviving economic growth since 2015.
Led by gains in smaller cities, China’s new home prices accelerated at their fastest pace in almost two years in July, defying persistent government curbs.
In 2017, China poured a record 1.84 trillion yuan ($278.21 billion) into the project, with new construction started on over six million homes that year, official data showed. The government is aiming to build another 5.8 million homes in 2018.
China’s shantytown spending so far this year is roughly equal to the market value of video streaming giant Netflix Inc. (NFLX.O)
The housing ministry, in a statement on Thursday, said construction work began on 4.07 million homes in the first seven months this year.
But ballooning property bubbles and hidden local debt risks as a result of credit stimulus from the project have sounded alarm bells for China’s top leaders. The housing ministry said in July it will restrict subsidies for new shantytown development projects to cities with hot property markets.
Ref : Property Report
