- Fuyang government will give buyers 1% of the purchase value
- The move is aimed at easing the stockpile of unsold homes
A Chinese local government plans to subsidize homebuyers directly, stepping up moves by regional authorities to boost home sales and trim a supply glut.
The government in Fuyang district in the eastern city of Hangzhou will give each buyer 1 percent of the value of a home after the purchase, it said in an official account on social-media site Weibo on Wednesday, which cited a copy of a government document. Subsidies will come from the district’s fiscal revenue, and the offer is available for one year starting Dec. 8.
A rising stockpile of unsold new homes is hampering government efforts to spur investment, prompting President Xi Jinping to pledge in a meeting last month to “dissolve property inventories”. As part of measures to ease unsold inventories, China plans to encourage small and mid-sized cities to offer rural residents subsidies and tax cuts to buy first homes in urban areas, according to people familiar with the matter this week who asked not to be named because the plan hasn’t been made public.
More and more cities are offering incentives to prospective homebuyers. On Dec. 3, the Puyang city government in Henan province started to subsidize farmers if they purchase new homes in the city, according to a Dec. 4 statement on the city government’s website. Farmers will receive cash of 150 yuan per square meter for their first purchase, and 100 yuan per square meter for a second purchase, city officials said in a statement.
The move aims to “shore up buyers’ confidence” and “speed up clearing of home inventory” in the city, the Fuyang government said in a separate statement on its official WeChat account Wednesday.
The district had 826,200 square meters of unsold apartments as of Oct. 31, it said in the WeChat statement. That is almost double the 461,700 square meters of homes sold in 2014, according to a statement last December on the district government’s website.
— With assistance by Emma Dong