China Struggles to Boost Housing Market Through Old-for-New Home Subsidies
• Local governments in China are encouraging housing upgrades through "old-for-new" initiatives that subsidize new home purchases when old homes are sold.
• The initiatives aim to inject liquidity into the stagnant housing market, but have seen limited success so far.
• Buyers are hesitant to sell old homes at low prices and prefer more flexibility in choosing new properties.
• Government acquisition of old homes to repurpose into affordable housing poses potential financial risks.
• Fundamental recovery in home sales depends on improvement in buyer income and price stability.