Urbanization clears inventories

Updated 2017-02-24 10:43:45 Global Times

Farmers, migrants encouraged to buy homes in cities

The nation's top housing regulator will continue encouraging migrant workers and farmers to purchase homes in cities, which is seen as an important move to reduce excess housing inventories across the country.

The new-type urbanization is a key method of clearing the housing inventory, Housing and Urban-Rural Development Minister Chen Zhenggao said on Thursday at a press conference in Beijing.

The State Council, China's cabinet, proposed the National New-type Urbanization Plan (2014-20) in 2014, aiming to make cities more accessible for migrants.

Banks and local governments have issued policies to help migrants buy homes in cities. In 2016, for instance, the Agricultural Bank of China started offering special home loans to farmers for this purpose.

In 2016, in some Chinese cities, homes purchased by migrant workers and farmers accounted for 50 percent of the total sales, Chen said. The proportion was as high as 70 percent in some counties.

In addition, the regulator pledged to convert unsold homes into rental units to improve the rental market and clear out inventories.

The latest data from the National Bureau of Statistics (NBS) showed that China had 695 million square meters of unsold commercial and residential property at the end of 2016, down 3.2 percent from a year earlier.

Clearing the inventory is a part of the central government's efforts to stabilize the real estate market. Targeted measures will also be taken to curtail speculation that has caused bubbles in some local markets.

During the conference, Vice Minister of Housing and Urban-Rural Development Lu Kehua said authorities would increase supervision over real estate agents and property developers, cracking down upon illegal practices.

"China's property market will stabilize and cool down amid authorities' increasing restrictions on property purchases and sales," Li Zhanjun, research director at Shanghai-based E-House China R&D Institute, told the Global Times on Thursday.

But demand will drive up prices as soon as those restrictions are lifted, Li opined.

New home prices fell in January on a monthly basis in 11 of the 15 first- and second-tier cities with overheated property markets, according to the NBS, which tracks home prices in 70 cities every month.

The declines ranged from 0.1 to 0.5 percent.

Chen predicted that the real estate market will remain stable in the first quarter of 2017, with home prices and sales volumes about equal to what they were in the first quarter of last year.

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