In order to attract people to buy houses, many local authorities in China have been offering cash subsidies to eligible homebuyers. However, due to the economic downturn in China, the fiscal revenue of local authorities has decreased, and many promised housing subsidies have not been paid out. Some homebuyers who purchased properties seven years ago still have not received their full housing subsidies.
As the real estate market in China continues to slump, local Chinese Communist Party authorities have been offering cash incentives to many homebuyers to stimulate home purchases.
According to incomplete statistics, so far this year, 37 cities including Ezhou in Hubei Province, Lishui in Zhejiang Province, Wuhan, Nanning, Harbin, Shanghai, Guangzhou, Dalian, Tianjin, Ningbo, Dongguan, Fuzhou, Beihai, Zhengzhou, and others have issued housing subsidy policies. The beneficiaries of these subsidies include regular homebuyers, rural residents purchasing property in cities, families with multiple children, young talents, and non-local residents. The forms of subsidies vary, including cash, tax fees, and housing vouchers. The amounts of subsidies range from tens of thousands to several hundred thousand Chinese yuan. Subsidies for attracting talents are usually larger. For example, on March 5th, 2023, Guangzhou Development Zone and Huangpu District offered a maximum subsidy of 5 million yuan to individuals purchasing homes to attract talent.
However, as the overall economy in China declines, the speed of distributing housing subsidies in various regions has slowed down. The longest duration reported is a case where even after seven years, a homebuyer has still not received the promised housing subsidy from the authorities.
In March of this year, a resident in Rong County, Zigong City, Sichuan Province, posted on the People’s Network leadership message board, stating that in 2015, they purchased eight units of commercial housing in Tianyu City in Rong County with a subsidy of 200 yuan per square meter. They applied for the subsidy in December 2019, but after four years, they have yet to receive it.
In December 2023, a netizen from Fushun County, Zigong City, Sichuan Province, posted on the People’s Network leadership message board, expressing that while there was a subsidy of 200 yuan per square meter when they purchased their property, the subsidy has now been discontinued.
In November 2023, a netizen in Lezhi County, Ziyang City, Sichuan Province, posted on the People’s Network leadership message board that in 2016, they bought a house in Hanlin International in Lezhi County. As of November 2023, after seven years, they have only received 27.5% of the subsidy.
In April 2023, a resident in Ruzhou City, Henan Province, posted on the People’s Network message board, inquiring about the delay in receiving the 29th batch of housing subsidies, stating that it has been several years since purchasing the property.
In response to these concerns, local authorities have publicly stated that due to the impact of the epidemic and the economy, there is significant pressure on county fiscal funds, with increasing contradictions between fiscal revenue and expenditure. Fiscal funds are being prioritized as per higher-level requirements for ensuring basic livelihoods, wages, and operational needs. This has led to delays in fulfilling housing subsidy payments.
Li Yujia, a researcher at the Guangdong Housing Policy Research Center, commented to First Financial that the delay in housing subsidy funds reflects the urgent attitude of local governments to stimulate the property market, without considering the local financial support capacity. While the responsibility for stabilizing the real estate market lies with the housing department, distributing housing subsidies requires actual financial resources. Fundamentally, fiscal funds are public funds that should be used for public welfare, and should not be spent to stimulate the property market. Therefore, although preferential policies may attract some homebuyers in the short term, inadequate policy implementation could have repercussions on future talent attraction, investment promotion, and other areas.