Chinese state-owned companies are buying foreclosed property projects, reports Reuters. The move is a sign that government efforts to reduce massive oversupply in the crisis-hit housing sector are finally getting traction, albeit at a slow pace.
Analysts say the involvement of state firms may cushion the pace of further home price falls and ease the drag that the property slump has had on China’s economic growth since 2021.
But they say it could also prolong the process of the housing market finding a bottom as distressed assets change hands at a deep discount instead of being fully written off. “You’re simply putting your finger in a hole in the dam,” Sam Radwan, chief executive of Enhance International, a Chicago-based real estate consulting firm with Greater China operations, told Reuters.