China Construction Bank plans to set up a 30-billion-yuan ($4-billion) fund to finance rental housing.
The state-owned lender said in a statement late on Friday that it plans to invest in real estate projects and turn them into affordable rental houses.
This is the latest move to help the struggling property sector, which has been hit by a massive debt buildup, mortgage boycotts and sluggish sales.
Beijing has been stepping up efforts to boost the real estate sector. Property and construction account for more than a quarter of China’s economy.
The authorities have allowed affordable rental houses to be listed in the form of real estate investment trusts (REITs), opening a fresh financing channel for the business.
In July there were reports that China planned to launch a real estate fund to help developers resolve the crippling debt crisis.
The fund will initially be set at 80 billion yuan through support from China’s central bank, and China Construction Bank will contribute 50 billion yuan, a source said.
China’s policy banks and local governments have also been setting up funds to help cash-strapped developers finish building pre-sold properties, as non-payment protests by home buyers have reportedly spread to more than 340 projects.
- Reuters with additional editing by Jim Pollard