China Needs Unconventional Measures To Stabilise Real Estate

China needs unconventional and more targeted measures to stabilise its property sector and prevent systemic risk, said Lian Ping, director of the Guangkai Chief Industry Research Institute in an Yicai.com article. Lian proposed scrapping home purchase limits nationwide, and significantly lowering benchmark interest rates for first-time mortgages by 1.0 to 1.5 pp. Authorities should establish a CNY1 trillion housing re-lending programme to ease banking pressure, and create a property stabilisation fund with CNY200 billion of initial capital from the central government and additional funds from policy banks, large commercial banks, insurance companies, and asset management companies.