China is preparing to mobilise companies owned by the central government in Beijing to purchase unsold homes from distressed property developers, following the limited success of a previous initiative that relied on local governments, according to people familiar with the matter.
Regulators are planning to ask some of the biggest state-owned enterprises and bad debt managers including China Cinda Asset Management to help clear the housing glut, said the people, asking not to be identified discussing a private matter.
The firms will be allowed to tap 300 billion yuan (S$53.5 billion) of funding the central bank had earmarked for the programme in 2024, one of the people said.
The renewed effort, which is still under discussion, could help speed up the clearance of China’s 408 million square metres, or about half the size of Singapore, of excess inventory and ease the financial burden of the troubled developers.
Officials are also considering scrapping a price cap for the programme in a bid to accelerate the process and improve the economics of the plan for both developers and state buyers, people familiar with the matter said in March.
The Housing Ministry and Cinda did not immediately respond to requests for comment.
While the move to enlist bad-debt managers might help improve sentiment, the impact may be limited by the firms’ own stretched finances.
The plan comes as China’s property sector hits a new low with the
delisting of China Evergrande Group
and new-home sales by the 100 largest developers falling more than 20 per cent for two consecutive months.
The People’s Bank of China (PBOC) launched a nationwide relending programme in May 2024 to help local state-owned companies buy unsold homes, and said a few months later it will ramp up the initiative.
There are about 60 million unsold apartments in the country, which will take more than four years to sell without government aid, Bloomberg Economics estimated in May 2024.
However, progress has been slow with less than 6 per cent of the announced loans approved so far, according to a Bloomberg Intelligence report early in August 2025.
Acceleration of the programme might be unlikely given a mismatch in the locations of unsold homes and demand for affordable housing, the report said.
When China’s property sector started falling into distress more than four years ago,
Beijing sought help from bad-debt managers
.
Regulators told firms including Huarong Asset Management and Cinda to participate in the restructuring of weak developers, acquire stalled property projects and buy soured loans.
Then, in early 2023, the PBOC channeled 80 billion yuan of loans through these bad banks to selected developers at an annual interest rate of 1.75 per cent, while encouraging the bad banks to match that amount with funds from their own reserves, people said at the time.
However, few projects have actually been implemented under the policy, and its effect has been lackluster.
The four largest bad-debt managers themselves were grappling with souring loans after over-extending during China’s real estate boom.
China’s efforts to put a floor under the years-long real estate slump have underwhelmed as domestic demand and the job market remain weak.
Regulators have also yet to offer more drastic stimulus.
Chinese President Xi Jinping called for the acceleration of a “new model” for property development at the Central Urban Work Conference in July, promoting a
more balanced approach to urban planning and renovation
– while falling short of some investors’ expectations for more aggressive measures.
The country’s home sales extended their slump in July as declining prices failed to attract buyers.
Analysts including those from UBS Group AG have delayed expectations of China’s property recovery to mid-to-late 2026. BLOOMBERG