Shanghai to buy second-hand homes for rental housing in pilot to support property market

In a move to bolster the stability of the property market, Shanghai unveiled a plan to buy second-hand homes for use as public rental housing, with the move timed to coincide with the opening of the city’s annual “two sessions” meetings.With the official launch of a pilot programme on Monday, the city aims to meet rental demand from young residents including college students and new urban arrivals. The initiative will roll out first in the downtown districts of Pudong, Jing’an and Xuhui.Backed by China Construction Bank, the move was intended to encourage housing affordability, stimulate market liquidity and shorten wait times for public rental housing, officials said.Analysts said such city-level tactics could help stabilise the beleaguered property market in the absence of broader stimulus measures.“While a major [national] policy overhaul is not broadly expected, a steady introduction of targeted measures will be essential to support a recovery in housing sales volumes in the short term,” said Michelle Kwok, head of Asia real estate and Hong Kong equity research at HSBC.Each of the three Shanghai districts had already formulated a work plan based on actual conditions, officials said. Priority for acquisition would be given to homes in prime locations, with clear property rights, small to medium-sized layouts and owners who were motivated to trade in, they added.