Xintang Town’s Plan to Buy Unsold Housing at Cost Price Raises Concerns Over Shady Dealings

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The housing inventory digestion cycle in Xintang Town rose from 15 months in the second half of 2023 to the current 24 months.

The government of Xintang Town, in Guangzhou, has announced plans to buy commercial housing from developers to increase the supply of affordable housing. The move has fueled concerns about the potential for shady dealings in the choice of which properties to buy.

According to a posting on the government’s website, the houses must have obtained a pre-sale license and meet the affordable housing demand, with the total construction area greater than 20,700 square meters.

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The Xintang government plans to purchase commercial housing to increase affordable housing, causing concerns about property selection.
Eligible properties must have pre-sale licenses and a construction area over 20,700 sq meters; 13 developers have registered.
The central bank pledged 300 billion yuan ($41.4 billion) for cheap loans to help local enterprises buy unsold apartments for affordable housing amidst a high housing inventory.

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What Happened When

May 17, 2024：: The central bank pledged to provide 300 billion yuan ($41.4 billion) in cheap loans to enable financial institutions to lend to local state-owned enterprises so they can buy unsold apartments and turn them into affordable housing.

May 31, 2024：: Data released by property research institute Hope China indicated that the housing inventory digestion cycle in Xintang Town rose from 15 months in the second half of 2023 to 24 months. The average monthly transaction of commercial housing was only 45,000 square meters over the past three months.

AI generated, for reference only