RT.com
04 Feb 2023, 23:44 GMT+10
A large stock of unfinished housing is among the major problems to be addressed, the fund says
China is still facing a real estate crisis and its government has a lot of work to do to fix the problems, the International Monetary Fund (IMF) said on Friday.
The cash-strapped property sector, which accounts for a quarter of the Chinese economy, has struggled with defaults and stalled projects, hitting market confidence and dragging down growth in the world's second-largest economy.
IMF economists welcomed recent measures by the country's authorities to ease restrictions on financing for the sector but pointed out that "additional action" will be needed in order to end the real estate crisis.
"If you look at the measures, a lot of them address financing issues for the developers that are still in relatively good financial health, so that will help," deputy director in the IMF's Asia Pacific Department, Thomas Helbling, told CNBC.
However, property developers are still facing "severe" difficulties, he noted, adding that "the issue of the large stock of unfinished housing more broadly is not yet addressed."
The Covid-19 pandemic has seriously affected the housing market, causing financial difficulties resulting in a slowdown in construction in the country where apartments are typically pre-sold to consumers. Last year, some home buyers even halted their mortgage payments in protest.
Chinese authorities subsequently emphasized the need to help developers finish building those pre-sold apartments. Still, residential floor space sold in China slumped by almost 27% last year, while real estate investment dropped by 10%, according to official numbers.
Now Beijing has to figure out how restructuring can be achieved, and who will absorb the losses, Helbling said.
"Otherwise, the sector will continue to slump and remain a risk and also constrain households that are overexposed to the property sector, and will have cash tied up and their savings tied up, which will be a handicap for the broader economic recovery," he added.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Travel Trade news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Travel Trade.
More InformationWASHINGTON, D.C.: Filmmaker Peter Jackson's lifelong fascination with the extinct giant New Zealand flightless bird called the moa...
NEW DELHI, India: India has submitted a revised proposal to the World Trade Organization (WTO) in Geneva to implement retaliatory tariffs...
SAN FRANCISCO, California: Nvidia, the Silicon Valley chipmaker at the heart of the artificial intelligence boom, this week briefly...
REDMOND, Washington: Artificial intelligence is transforming Microsoft's bottom line. The company saved over US$500 million last year...
WASHINGTON, D.C.: A federal rule designed to make it easier for Americans to cancel subscriptions has been blocked by a U.S. appeals...
BASTROP, Texas: In a surprising turn at Elon Musk's X platform, CEO Linda Yaccarino announced she is stepping down, just months after...
WASHINGTON, D.C.: Travelers at U.S. airports will no longer need to remove their shoes during security screenings, Department of Homeland...
PARIS, France: French military and intelligence officials have accused China of orchestrating a covert campaign to damage the reputation...
New Delhi [India], July 13 (ANI): Chairperson of the Congress Parliamentary Party (CPP) Chairperson Sonia Gandhi has called a meeting...
New Delhi [India], July 13 (ANI): Chairperson of the Congress Parliamentary Party (CPP) Chairperson Sonia Gandhi has called a meeting...
Paschim Medinipur (West Bengal) [India], July 13 (ANI): Continuous rainfall has led to severe flooding in several parts of West Bengal's...
Ramban (Jammu and Kashmir) [India], July 13 (ANI): The Ramban district administration has made elaborate and round-the-clock arrangements...