(Yicai) May 30 -- Southwestern China's Kunming has become the first major city to reveal its action plan to start acquiring local housing, supported by a policy shift announced less than two weeks ago.

The capital of Yunnan province will purchase new but unsold homes in five districts via state-owned enterprises within the next month, and turn them into affordable housing for low-income families, the municipal bureau of housing and urban-rural development announced recently.

Kunming prefers to buy properties close together in the same building to streamline management, the bureau said, without disclosing the budget. The houses can be a maximum of 120 square meters and they need to meet the conditions of clear ownership rights, tradability, convenient transportation, and complete supporting facilities. 

The central government is stepping in to revitalize the sluggish property market. On May 17, Vice Premier He Lifeng said that cities with a large inventory of housing could purchase some properties at a reasonable price and convert them into affordable housing for residents. 

Tao Ling, deputy governor of the People’s Bank of China, said the same day that the central bank would set up a CNY300 billion (USD41.4 billion) relending facility for government-subsidized housing, a move that is expected to bring CNY500 billion in bank loans to SOEs which are encouraged to absorb the excess inventory.

China's housing inventory has been rising since 2022, reaching a historical high at the moment, according to a report released by Cinda Securities. A decline in inventory could stabilize market expectations and support price development, it added.

Editors: Tang Shihua, Emmi Laine