China Should Set Up Central Fund To Tackle House Delivery

The central government should establish a fund to guarantee the delivery of housing projects, given the lack of funds in local governments and developers as well as relatively low motivation of banks to provide funds, Yicai reported citing Lu Ting, chief economist of Nomura China. Authorities should guarantee delivery of projects with high sales rates to homebuyers, and local governments should acquire the remaining unsold units and use them as affordable housing with funding support from the central government, said Lu. The downward spiral of the entire Chinese real-estate market persists, and more proactive policies will be introduced in the coming year, Lu added.