Officials to brief measures for bolstering property sector

China is set to hold a press conference on Thursday focused on efforts to bolster the property sector. Key officials from multiple departments, including the minister of housing and urban-rural development, will jointly introduce measures for promoting a stable and healthy real estate market.

These latest efforts to stabilize the property market follow a series of monetary and fiscal policies announced recently which signaled that the Chinese government has ample policy tools at its disposal to sustain economic growth, analysts said.

Following China's announcements of comprehensive policy support, several foreign institutions raised their GDP forecasts for the country in 2024.

Minister of Housing and Urban-Rural Development Ni Hong, along with officials from Ministry of Finance, Ministry of Natural Resources, the People's Bank of China, and the National Financial Regulatory Administration will join a news conference on Thursday, according to the State Council Information Office.

Chinese property-related stocks on Wednesday rallied on speculation of more policy support to boost the housing sector to be announced during the joint briefing. Over 10 stocks hit their daily up limit.

The Thursday press conference comes after Minister of Finance Lan Fo'an told a press conference on Saturday that China will apply a set of fiscal policy tools to help stabilize the property market.

For the property market, the minister said the country would apply a set of fiscal policy tools including local government special-purpose bonds, special funds, and taxation policies to help stabilize the sector.

Local governments will be supported in using special-purpose bonds to reclaim eligible idle land or to expand land reserves if needed, said Liao Min, vice minister of finance, at the same press conference, according to Xinhua.

Special-purpose bonds will also be utilized to purchase existing commodity houses for affordable housing, Liao said.

The policy measures, combined with recent policies such as interest rate cuts and reserve requirement ratio reductions, unified minimum down payment ratios for housing loans, and the cancellation or further relaxation of purchase restrictions in first-tier cities, will help the real estate industry quickly reduce inventory and bottom out as soon as possible, Chang Haizhong, executive director of corporates at rating agency Fitch Bohua, told the Global Times.

Saturday's policy package also includes increasing the debt ceiling on a relatively large scale in a lump sum to replace existing hidden debts of local governments and help defuse their debt risks.

These policy initiatives demonstrate China has a strong and effective set of tools to stabilize growth, analysts said.

Wu Chaoming, a deputy head of the Chasing Research Institute, told the Global Times on Wednesday that the emphasis on increasing the debt ceiling leaves room for future policies, further instilling confidence in investors.

"Fiscal spending may significantly accelerate in the fourth quarter. At the same time, supported by a package of incremental policies, China's consumption, infrastructure investment, and prices are also anticipated to show signs of recovery in the fourth quarter," Wu said.

Forecasts raised

Saturday's press conference came after a broader-than-expected policy package was announced by China's financial authorities last month to stimulate economic recovery, including reducing the reserve requirement ratio for banks and mortgage rates for existing homes, as well as introducing new monetary programs to boost the capital market, among other initiatives.

Amid China's intensive policy measures, foreign institutions have recently revised their GDP growth forecasts for China upward for 2024.

"We raise our Q4 2024 growth forecast to 4.2 percent year-on-year to 4.4 percent on much busier stock trading. Accordingly, we slightly raise our 2024 annual GDP growth forecast to 4.6 percent from 4.5 percent," Lu Ting, an economist with Nomura, said in a note sent to the Global Times.

UBS economists led by Wang Tao said that while the Ministry of Finance has not announced a large-scale short-term fiscal stimulus, it has provided forward-looking guidance on forthcoming fiscal support. If these policies are effectively implemented, coupled with support for the real estate market, China's GDP growth rate could approach the 5 percent target for 2024.

Goldman Sachs on Sunday also increased its China's 2024 GDP projection from 4.7 percent to 4.9 percent, the Securities Times reported.