Sinocism with the note.
Renewed hopes for a massive real estate bailout – Bloomberg reports that the government is “considering a proposal to have local governments across the country buy millions of unsold homes”. Caixin reported over the weekend that it “has learned from multiple sources that policymakers have also been studying the creation of a national real estate investment vehicle tasked with acquiring and revitalizing unfinished and inventory properties across regions.” Caixin also wrote in that cover story that “the financial requirements are substantial. Guotai Junan Securities estimates that a national investment vehicle would need between 9 trillion yuan and 30 trillion yuan to acquire the 4.2 billion square meters of properties awaiting sale as of the end of 2023, within a timeframe of 1.5 to 3 years.”
This proposal sounds interesting, and reports may give hope that some sort of massive bailoput to resolve the massive real estate overhang may be forthcoming, but I think there are some real challenges that need to be worked through.
