China approves guidelines to boost affordable housing amid debt crisis

(Patria) - The Chinese government has approved guidelines for planning and building affordable housing at a meeting chaired by Premier Li Qiang, state news agency Xinhua reported.

China's property sector is in a deepening crisis with rising default risks among some investors as they struggle to sell homes and raise funds, Reuters writes.

Xinhua did not provide details on the government's new guidelines, but quoted the cabinet as saying it would expand investment and promote the healthy development of the real estate market.

Separately, China's central bank announced guidelines on relaxing housing loan rules, in a move aimed at boosting loan applications and home purchases.

Beijing has been promoting more affordable housing in recent years.

A Ministry of Housing and Urban-Rural Development official said last year that China would add 6.5 million new affordable rental housing units in 40 major cities during the period 2021-2025.

However, with the property downturn, official data shows that new home prices fell in July for the first time this year, highlighting the urgency for bolder policy support.

On Friday, the housing ministry, the central bank, and the national financial regulator jointly issued a notice on easing mortgage policy to help revive the sector.

China's housing market has struggled with a severe debt crisis over the past two years, initially triggered by government moves to curb rising debt.