BEIJING: China said Thursday it would boost credit available for unfinished housing projects to more than $500 billion as it unveiled another round of measures to shore up the sector and try to reignite the economy. The real-estate sector has long accounted for around a quarter of gross domestic product and experienced dazzling growth for two decades but a years-long housing slump has battered growth as authorities eye a target of around five percent for 2024.

At a briefing, housing minister Ni Hong offered fresh help, saying Beijing will “increase the credit scale of white-list projects to four trillion” yuan ($562 billion) by the end of the year, up from more than two trillion. The “white list” scheme, announced earlier this year, pushes local authorities to recommend housing projects for financial support and work with banks to ensure their completion.

“The urban real-estate financing coordination mechanism should strive to include all eligible real-estate projects in the white-list,” Ni said. “An additional one million worn-out homes... will be renovated,” he added. “There are many safety hazards and poor living environments in urban villages, and people are eager to renovate.” The move, he said, would “be conducive to absorbing the existing stock of commercial housing”.

China’s leadership last month warned the economy was being plagued by “new problems” as officials unveiled a raft of stimulus in one of the biggest drives to boost growth for years. Among the measures were a string of interest rate cuts, the loosening of restrictions on home-buying and moves to free up cash for banks to lend more.

On Thursday, Beijing said it estimated that “existing mortgage rates will fall by an average of about 0.5 percentage points” under those cuts. That, central bank deputy governor Tao Ling said, would “save 150 billion yuan in interest expenditure overall, benefitting 50 million families and 150 million residents”. A blistering market rally fuelled by hopes of major stimulus has faltered as authorities refrained from providing a specific figure or fleshing out any of the plans.

A number of major cities have also in recent months eased house-buying restrictions — most recently this week in Chengdu, the capital of southwestern province of Sichuan, and the northern port city of Tianjin. The latest announcement comes as China prepares to release third-quarter growth data Friday, which is forecast to be the slowest this year.

Hong Kong shed one percent and Shanghai a little more than that, having started the day on a strong note, with property stocks — which had rocketed in the wake of the initial round of measures — tumbling. “They’re still trying to talk the talk, with more noise about stabilizing the property market,” Stephen Innes, Managing Partner at SPI Asset Management, said in a note. — AFP