China's oversupply of unsold homes was another heatedly discussed topic at the Central Economic Working Conference.
It was agreed that rural residents relocating to urban areas should be allowed to register as city residents, which would enable them to buy or rent property. In addition, a low-rent public housing program will be launched and the government will support rental enterprises.
To address market weakness and a broader economic slowdown, China's central bank cut benchmark interest rates five times since last November. It also lowered banks' reserve requirement ratio three times since February. Deposit requirements for second-home purchases were reduced and some local governments rolled back restrictions on home purchases.
Officials in many small cities have already showed resolve in addressing the country's housing woes. Our reporter went to Anyang city in Henan province, to see how the local government is stimulating property sales there.
Time: 7 o’clock. Temperature: minus 4 degrees. It's a regular cold morning in Anyang, central China's Henan province. But before the doors of the city’s real estate trading center, people have formed a long queue. They're waiting to get their 20,000 Yuan subsidies to buy new apartments.
"I came here a 7 o'clock last night and stayed in my car overnight. I had to come so early because many people are waiting to get the subsidies," said a local resident.
"I was be hesitating to buy an apartment. But after the government announced the policy, I decided to go for one. If there are subsidies like this in the future, I’ll probably buy another one," said a local resident.
This August, Anyang government introduced a series of measures to attract more people to buy apartments. Anyone, including city dwellers or migrant workers, can get a subsidy of 20,000 Yuan, if they buy new homes through Dec. 31. So far, nearly 13,000 houses have been sold, costing the local government a total subsiday of over 2 hundred million Yuan.
"Besides the financial and interest subsidies, more stimulus measures have been rolled out, including tax reduction. We can see huge growth in property sales on a year-on-year basis. And related industries such as renovation and home appliances have reported good sales," said Shi Zhijie, Anyang Housing Administration Bureau.
China today is facing a critical challenge: How to fill the people into millions of empty, unsold homes. Most of these properties are in third- and fourth-tier cities, which have been hit hard by emigration to larger cities.
Local authorities in Henan Province are pinning their hopes on urbanization as a source of property de-stocking. Last month, the province vowed to allocate at least 300 million Yuan annually, to encourage farmers to buy their first home by cutting transaction fees.
"Urbanization can't happen if migrant workers have nowhere to live in the cities. So we will dedicate our efforts to making sure they can settle where they want, and enjoy the same social benefits. This will fuel consumption in housing," said Li Xuejun, an engineer.
In 2014, China's housing market experienced a downturn, due to weaker demand and a supply glut. And the trend continued into 2015, with a continued decline in sales and prices. According to data from the National Bureau of Statistics, the unsold home inventory hit a record 686.3 million square meters by the end of October, up 17.8 percent from the previous year.
Under record high destocking pressure, cities like Anyang are making all their efforts to increase the incentives for people to buy homes. Many say that besides existing stimulus measures, measures such as transforming commercial housing into affordable housing are also expected next year.
