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China plans to inject $137 billion to revitalize housing market

China plans to inject $137 billion to revitalize housing market

Posted on November 24, 2023   |  

China is aiming to revitalize its struggling property market by allocating at least 1 trillion yuan ( $137 billion) for urban village renovations and affordable housing.

The People’s Bank of China will gradually channel this funding through policy banks, with the ultimate goal of reaching households to facilitate more affordable home purchases.

With a planned injection of 1 trillion yuan into Priority Sector Lending (PSL), China is poised to surpass the previous record established in 2019 in its support for targeted sectors such as affordable housing.

Priority Sector Lending enables the central bank to provide developers with low-cost funds for the refurbishment of shantytowns. 

These funds are used for land acquisition, and local governments subsequently offer financial assistance to households affected by demolitions, allowing them to buy new or existing apartments.

State-owned enterprises, including China Resources Land Ltd., have historically benefited from similar initiatives aimed at promoting affordable housing.

This strategic move aligns with China's recent economic stimulus measures, including a decision to increase the budget deficit by issuing an additional 1 trillion yuan in government bonds.



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