Huzhou city to encourage SOEs to purchase apartments from struggling property developers

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Huzhou city, East China’s Zhejiang province, will encourage state-owned enterprises (SOEs) to purchase apartments from struggling real estate developers to use as indemnificatory and resettled housing, according to a notice released by the local real estate regulator on Tuesday.

The move could help lower home inventories for some real estate companies and it offers a new approach to help solve the current problems facing the real estate sector, as well as a new housing supply pattern for the SOEs, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute.

Some cities in China have been encouraging SOEs to build indemnificatory and resettled housing in recent years as one move to promote supply-side structural reform of the housing sector. Generally the houses could be rented at lower-than-market-level prices to firms’ own employees or new graduates in the city with no houses, and other groups.