China might introduce more easing policies in 2016 to consume unsold home inventories, a report by the Bank of Communications said, despite data from Friday showing signs of a warming market.
The government could further lower the minimum down payment by 5 percentage points to 20 percent of the home price for a first home buyer, according to the report unveiled late Friday. The change would apply to buyers borrowing from commercial banks in cities without home purchase quota policies.
The authorities might also increase housing provident fund loans and cut transaction taxes for second-hand homes to spur the property market, it said.
The country's unsold home inventory hit 696.4 million square meters at the end of November, about 10 million square meters more than the record reached in the previous month.
"Oversupply is the most serious problem in the property market," said Yang Hongxu, deputy head of E-house China R&D Institute, which provides property market research.
A sluggish housing market would delay the bottoming out of the Chinese economy and even threaten the stability of the financial system as property is widely used as collateral for bank loans, Yang said.
Jan.-Nov. home sale revenues soared by 15.6 percent year on year to hit nearly 7.5 trillion yuan (1.1 trillion U.S. dollars), driven by robust demand in first- and second-tier cities, the bank's report said, adding that a record high annual sales volume is expected.
Of the 70 large and medium-sized cities surveyed in November, new home prices climbed month on month in 33, up from 27 in the previous month, the National Bureau of Statistics data showed Friday.
Twenty-seven cities reported month-on-month price declines, down from 33 in October. On a yearly basis, 21 cities posted new home price increases, up from October's 16.
