More on Real Estate Rescue

A top level real estate rescue policy is now a "high probability." Real estate is a major factor in the cement and steel slowdowns, and a key component in fixed asset investment.

The policy garnering the most speculation is financial support for the removal/renovation of shantytowns, which would require moving people out of old homes and into new ones. It is dubbed "monetization of shantytowns." This could go a long way to solve inventory problems in some cities and was already proposed earlier this year: Fastest Way to Reduce Housing Inventory: Bulldoze Shantytowns. The same things said by the Ministry of Housing at the start of the year are being talked about now as a bailout measure. It could mean the policy becomes an official and top priority policy, or it could mean the plan is flawed due to constraints such as impaired local budgets.

Also consider this from 2014 (Bloomberg): China to Spend More Than $162 Billion on Shantytowns
China said it will invest more than 1 trillion yuan ($162 billion) redeveloping shantytowns this year as the government detailed how it will boost its urban population to support growth.
If 1 trillion yuan wasn't enough in 2014, how much is needed in 2016 and where will the cash come from? Visions of 4 trillion dance in my head. The second article below mentions the banks providing loan support. It sounds like 2008 all over again.

Reports also say a cut in the down payment minimum to 20% nationally is likely, along with the return of 30% discount mortgages, which were around back in 2010. A full easing of restrictions on second and multiple homes may also be in the cards.

iFeng: 房地产调控政策将推 定向宽松是大概率事件

iFeng: 媒体称房地产定向宽松近期将出 有三种政策可能性

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