BEIJING: Chinese officials tightened the rules for selling unfinished homes on Friday as they try to lift the country's property market out of a years-long slump that has weighed on consumption.

Half-built apartment buildings dot cities across China, relics of a property boom that came to a halt when the government clamped down on excessive borrowing and rampant speculation in 2020.

That left several developers grappling with massive debt—wreaking havoc on buyers who poured their savings into new homes that were never finished.

Chinese officials instructed local authorities on Friday to "vigorously and orderly promote the sale of ready-to-move-in commercial housing," while they also urged more protections for buyers who purchase homes before construction is complete.

The instructions came in a joint statement from China's National Financial Regulatory Administration, as well as Beijing's housing and natural resource ministries.

The financial regulator and China's central bank also announced on Friday new lending guidelines that raise the maximum length for personal housing loans to 40 years, from the existing 30-year mortgage limit.

"These policies are a meaningful step in the right direction," wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

"The decision to allow mortgage loans up to 40 years helps to mitigate the home buyers' debt burden," he said.

China's leaders have battled sluggish domestic spending since the end of the Covid-19 pandemic, which has threatened growth even as exports and certain high-tech sectors boom.

"The weak domestic demand is to a large extent due to the troubled property sector," Zhang said, adding that the new housing policies showed officials "understand the urgency" to stabilize the market.

Mortgages

China tightens rules on selling unfinished homes to lift sector