China tightens property rules on unfinished homes

China tightened rules on Friday on sales of unfinished homes and urged wider use of ready-to-move-in housing, as officials try to stabilise a property market downturn that has weighed on consumer spending.

In a joint statement, the National Financial Regulatory Administration, the housing ministry and the natural resources ministry told local authorities to promote sales of completed commercial housing and strengthen protections for buyers who purchase homes before construction is complete.

The financial regulator and the central bank also issued lending guidelines raising the maximum personal housing loan term to 40 years from 30 years.

China's property slump followed a 2020 government clampdown on excessive borrowing and speculation. Some developers have been left with large debts, while buyers who paid for new homes have faced unfinished projects.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, called the measures "a meaningful step in the right direction" and said longer mortgages could reduce home buyers' debt burden.