China to ‘vigorously, orderly’ expand sales of finished homes in property-sector overhaul

Successful trial in central city will be expanded nationwide to give developers and projects ample funding, and to compensate homebuyers if developers go under

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Beijing’s emphasis on selling finished homes is a rectification of the once-rampant practice of Chinese developers launching home sales before units were built. Photo: AFP

Published: 9:00pm, 23 Aug 2024

Following a critical report this week about “disappointing progress” three months into Beijing’s plan to buy unsold homes and prop up China’s embattled property market, housing officials have reiterated intentions to expand sales of fully finished homes that are ready to be lived in – rather than half-built homes – in a bid to protect buyers and stabilise the sector.

Stressing that a host of measures are being taken in the real estate industry to restore confidence and ensure the timely delivery of finished homes to buyers, authorities said on Friday that sales of finished homes will be “vigorously and orderly” expanded in more locales. And for select projects, the sale of finished homes will be stipulated when land is auctioned.

“Many localities have launched a number of trial projects to sell fully finished homes and have explored the reform of the housing sales system … Joint efforts are also being made to uphold homebuyers’ rights and interests and to help developers get funding to complete projects,” Dong Jianguo, deputy housing minister, said at a State Council press conference.

Beijing’s emphasis on selling finished homes is a rectification of the once-rampant practice of Chinese developers launching home sales when units were not built, or even before construction had started. Homebuyers who made down payments have often faced project delays or developer defaults. The country has seen a spike in project failures and delays in home deliveries amid the sector’s downturn.

The emphasis on selling homes only upon their completion is putting more strain on the cash flow of numerous developers, but the move has been hailed by homebuyers as a means of restoring lost confidence and shoring up transactions.

Investment in real estate development saw a year-on-year decline of 10.2 per cent in the first seven months of 2024, following a 10.1 per cent drop from January to June and constraining fixed-asset-investment growth. Meanwhile, home sales across the country plunged by 25.9 per cent through July, year on year.