A leading Chinese economist has called for the financial sector to give greater support to demand on the residential property market in the wake of the Evergrande Group debt debacle.
Dong Ximiao (董希淼), chief researcher with MUCFC and economics researcher with Fudan University, has called for “expanding support for rational residential housing demand,” in an article published by state-owned media on 7 April.
“Finance is the arterial system for the real estate market,” wrote Dong. “We should further effectively implement differentiated residential housing loan policies, rationally control loan extension, better satisfy demand for owner-occupiers, and suppress investment and speculative housing demand.
“The next step should be to support more cities and financial institutions in making adjustments to real estate financing policies, including but not limited to loosening lending conditions, reducing initial deposits and making downward adjustments to lending rates.
“In particular, the intensity and pace of policy adjustments may be moderately increased for those cities with comparatively long housing inventory cycles, in order to reduce the burden on households and stimulate demand for housing.”
Dong also called for exploring and developing new models for the development of real estate in China.
“In the long-term, [we should] uphold equal emphasis on leasing and purchasing, vigorously develop the long-term rental housing market, and drive the development of social welfare housing.”