China is considering buying up millions of unsold properties as part of a radical plan to tackle its ongoing property crisis.
Beijing is reportedly consulting with local government officials on proposals that would pave the way for state-owned enterprises to purchase empty homes from beleaguered developers en masse.
Bloomberg said the proposals are still in the early stages but represent a scaled-up version of similar programmes that have been piloted across the country.
The homes would be purchased at deep discounts and converted into affordable housing, the reports said.
Previous plans suggest the ruling Communist Party is prepared to commit the equivalent of $280bn (£222bn) a year for five years to buy distressed properties and offer them at subsidised rents to families. These properties would be blocked from being sold on the open market.
China’s most senior leaders announced last month they were studying ways to “digest” the existing stockpile of homes in a move that sent Chinese stocks up sharply.
The world’s largest economy has struggled to deal with a property crisis that has seen some of its biggest developers default on their debts against a backdrop of weak growth and overbuilding in the sector.
Evergrande, once the world’s most valuable property company in the world, collapsed in 2021 triggering a crisis in the sector and dragging down growth. A Hong Kong court ordered the company to be liquidated earlier this year.
The International Monetary Fund (IMF) has also warned that Chinese growth will continue to slow to 4.1pc next year, well below the double-digit rates seen in the decade before the financial crisis. Growth is expected to slow to just above 3pc by the end of the decade.
Analysts have also sounded the alarm over China’s rising debt levels, which have climbed sharply in recent years. A report by the Institute of International Finance warned that global debt now stood at a record high of $315 trillion in the first three months of the year.
It said the increase was “primarily driven by emerging markets”, where debt surged to “an unprecedented high of over $105 trillion”. This is $55 trillion more than a decade ago, with China, India and Mexico seeing the biggest increases so far this year.
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