Government to Directly Subsidize Homebuyers in Hopes to Boost Home Sales
A local government is planning to subsidize homebuyers directly in a move that regional authorities are hoping to boost home sales and trim the supply glut. The local government in Fuyang district in the eastern city if Hangzhou is giving the homebuyer 1 percent of the value of the home purchase. The subsidies come s directly from the fiscal revenue of the district and is available one year starting this December.
Stockpile of unsold houses is hampering the efforts of the government in spurring investment, which prompted President Xi Jinping in pledging to dissolve property inventories. As part of the measures in easing unsold inventories, local government is planning to encourage small and mid sized cities to offer rural residents subsidies and tax cuts when buying their first homes in urban areas. A lot more cities are offering incentives to prospective buyers, for example in Puyang City started to subsidize farmers who purchased new homes in the city. Farmers received cash subsidy of 150 yuan per square meter for their first purchase and 100 yuan per square meter on a second purchase.
The move is said to shore up buyers confidence and to speed up the clearing of home inventory in the city. the Fuyang district government said that id has 826,200 square meters of unsold apartments as of October, double the 461.700 square meters of homes that were sold in 2014.