According to a Bloomberg report citing sources familiar with the matter, China is weighing additional steps to stabilize its ailing property sector amid increasing fears that further deterioration could undermine the country’s financial stability.
Among the options are the introduction of nationwide mortgage subsidies for first-time homebuyers. Officials are also considering measures to enhance income tax rebates for mortgage holders and reductions in home transaction costs, one of the sources added.
Deliberations over these initiatives have been ongoing since at least the third quarter, as market conditions worsened with both property sales and prices declining. The exact details and timing of the policy rollouts remain uncertain, the sources said.
Analysts at Morningstar view the fiscal easing measures, such as cutting taxes and fees, as consistent with previous expectations and note that these steps should help to encourage home-buying activity. They caution, however, that a sustained recovery in buyer confidence will also depend on a clear stabilization of property prices.
Following the reports, a benchmark index tracking Chinese real estate developers rebounded, climbing as much as 3.3%, marking the sharpest advance in two months.
Beijing has been grappling with a protracted four-year slide in the real estate market that has suppressed household wealth, dampened consumption, and weighed on employment. Although the sector showed tentative signs of revival last year after increased government support, the uptick quickly stalled. Since the second quarter, home sales have resumed their decline, and fixed-asset investment plunged in the most recent month.
One central element under consideration is subsidizing interest rates on new home loans, in an effort to stimulate demand from hesitant buyers wary of a flagging property market.
Meanwhile, analysis from Bloomberg Economics indicates that these proposed steps may provide only limited relief to the sector. The assessment suggests that, while the measures might generate a short-term increase in activity, they are unlikely to address the deeper imbalance between supply and demand.
Mortgage rates for first-time buyers in 42 major cities have remained at approximately 3.06% in recent months, little changed from October 2024’s record low of 3.05% when broader stimulus was introduced.
