China's bid to prop up property investment challenged amid glut | The Edge Property Singapore Singapore: "China’s moves to ease mortgage restrictions and cut interest rates are bearing fruit in the nation’s smaller cities, where home prices have staged a recovery. Now comes the bigger challenge: Clearing a supply glut to spur investment by developers.
Lower borrowing costs are helping a residential market recovery spread from the economic hubs such as Shanghai and Shenzhen to smaller and less-prosperous cities. New-home prices rose in September from August in more than half of the 70 major cities monitored by the government for the first time in 17 months. Yet, a construction boom over the past two years has led to 424.7 million square meters of unsold homes languishing nationwide as of Sept. 30.
Reviving investment in real estate is crucial for the government, which on Friday stepped up monetary easing with its sixth interest-rate cut in a year and scrapped a ceiling on deposit rates as part of efforts by Premier Li Keqiang to find new engines of growth. China cut the deposit first-time homebuyers in smaller cities need to put down last month and is targeting oversupply-plagued cities that account for about 85 percent of sales nationwide, according to China International Capital Corp."
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Lower borrowing costs are helping a residential market recovery spread from the economic hubs such as Shanghai and Shenzhen to smaller and less-prosperous cities. New-home prices rose in September from August in more than half of the 70 major cities monitored by the government for the first time in 17 months. Yet, a construction boom over the past two years has led to 424.7 million square meters of unsold homes languishing nationwide as of Sept. 30.
Reviving investment in real estate is crucial for the government, which on Friday stepped up monetary easing with its sixth interest-rate cut in a year and scrapped a ceiling on deposit rates as part of efforts by Premier Li Keqiang to find new engines of growth. China cut the deposit first-time homebuyers in smaller cities need to put down last month and is targeting oversupply-plagued cities that account for about 85 percent of sales nationwide, according to China International Capital Corp."
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