China is rolling out three primary modes to stabilize its real estate market: government acquisition, discounts and subsidies, and trade facilitation. Among these, the government acquisition mode, where local governments or state-owned enterprises (SOEs) purchase pre-owned houses, is showing the most promise. This approach allows for fewer restrictions on the eligibility of both pre-owned and new homes, potentially leading to more effective implementation.
In first-tier cities, the trade facilitation mode is predominantly used to reduce transaction costs and encourage property trading. While this method is expected to increase house trade-ins and attract move-up homebuyers—those looking to sell their current homes and purchase larger or newer ones—it relies heavily on market-driven factors. Consequently, a streamlined purchase process alone may not significantly boost home-buying demand.
Overall, China's comprehensive real estate measures aim to decrease the inventory of unsold houses and stimulate demand among homebuyers. However, the effectiveness of these policies varies, with government acquisition mode currently standing out as the most promising strategy to support property developers and stabilize the market.
Reference(s):
China's 3 modes for house trade-in: Govt acquisition may work best
cgtn.com
