(Bloomberg) — China unveiled a slew of measures to boost financing support for homebuyers and developers, marking its latest attempt to put a floor under the nation’s five-year property crisis.
Homebuyers will be able to borrow for a term of up to 40 years for their mortgages, up from the current 30 years, according to the central bank. China will also support fundraising by developers through equity and bond sales, the China Securities Regulatory Commission said in a separate statement Friday.
The changes were small in isolation, stopping short of the big bang stimulus that some economists think is necessary to bring an end to the real estate slump. But together they add up to Beijing’s boldest attempt in years to end the downturn, which has fueled around $130 billion of defaults and weighed heavily on the economy.
“The policies announced today are stronger than the market expected,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “They are a meaningful step in the right direction, suggesting policy makers understand the urgency to stabilize the property sector.”
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China’s economy showed widespread weakness in July, with consumption softening more than expected and new-home prices continuing to fall. Many economists estimate that growth slipped further below the government’s annual target, sparking a call from Premier Li Qiang to ramp up supportive measures.
The credit support is part of an overhaul of the way homes are sold nationwide. Beijing announced on Friday it will push developers to offer completed properties instead of using the pre-sales model that exacerbated the housing crisis.
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Under the new model, developers will only collect a small deposit from homebuyers. If they fail to deliver homes on schedule, buyers have right to walk away from the purchase.
To ease funding pressure, builders can pay land purchase fees in installment, offering respite to cash-strapped developers whose land purchases were once a major source of local government revenues.
Local authorities should standardize pre-sale conditions for newly built housing and effectively prevent delivery risks to safeguard homebuyers, according to a statement issued by several government departments.
Fundamental Shift
China’s real estate sales have shifted toward used homes as prices decline and buyers worry about how long it will take to build new properties. While some parts of the housing sector have picked up modestly on the back of government support, upticks are mostly in the resale market.
“China’s used-home sales has surpassed that of new homes, so the previous sales mechanism for housing — defined by pre-sales and rapid turnover — no longer fits the current market,” the official Xinhua news agency wrote in Q&A with the three central government authorities drafting the measures. “The pre-sales model needs urgent reform.”
As of last year, China’s sales of newly built residences have plunged more than half by area from the 2021 peak level, official data showed.
The current pre-sales system, which allows developers to sell residences before completion, has been widely blamed for fueling excess supply in the sector and contributing to a debt pile-up by developers. Unfinished home construction projects sparked widespread mortgage boycotts and dissent in the country a few years ago.
China last week sentenced the poster child of developer debt binge, China Evergrande Group’s founder Hui Ka Yan, to life in prison, bringing an end to its dramatic rise to once the world’s most indebted developer and fall from that.
When the property sector began its downward spiral in 2021, about 90% of new homes were sold before they were finished, according to research firm Proptech Innovations. That rate declined to about 68% in late 2025.
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