China Says It Will Start Buying Apartments as Housing Slump Worsens

In a housing crisis that shows no end, the Chinese government is stepping in as a buyer of last resort.

Chinese officials on Friday took their boldest step yet, unveiling a nationwide plan to buy up some of the vast housing stock languishing on the market. They also loosened rules for mortgages. The central bank said it would provide $41.5 billion in cheap loans to help state-owned enterprises buy housing built but not sold.

The flurry of activity occurred just hours after new economic data revealed a hard truth: No one wants to buy houses right now.

Policymakers have tried dozens of measures to entice home buyers and reverse a steep decline in the property market, which has shown few signs of recovering soon.

On Friday, authorities from across China dialed in to a video conference to discuss the challenges they faced. China's vice premier, He Lifeng, announced a major shift in the government's approach to dealing with the property crunch, which has prompted households to cut spending. Mr. He said local governments could begin to buy homes to start dealing with the huge numbers of empty apartments.

The government-purchased homes would then be used to provide affordable housing. Mr. He did not provide any details on when such a program would begin or how it would be funded.

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