THE Housing Ministry said yesterday that investment in a massive shantytown redevelopment project topped 1.37 trillion yuan (US$197.64 billion) in the first three quarters of the year.

China’s central bank has injected hundreds of billions of dollars into such shantytown redevelopment projects (SRP) through the Pledged Supplementary Lending (PSL) program, which has been largely used for cash compensation to residents whose homes are demolished.

Analysts say the project has boosted property demand as residents are encouraged to use cash compensation to buy a new home when their existing one is demolished

The policy helped boost home sales and prices in smaller cities that struggled for years with a glut of unsold homes, playing a key role in reviving economic growth since 2015.

Led by gains in smaller cities, China’s new home prices increased at a firm pace in September, showing the market remained resilient despite pressures from softer investment, a slowing economy and government curbs on the sector.

Average new home prices in China’s 70 major cities rose 0.9 percent in September from a month earlier, showed calculations from official data published Saturday, slower than the previous month’s reading of 1.4 percent, which was the fastest growth in two years.

In 2017, China poured a record 1.84 trillion yuan (US$278.21 billion) into the shantytown redevelopment project, with new construction started on over 6 million homes that year, official data showed. The government is aiming to build another 5.8 million homes in 2018.

The Housing Ministry said construction work began on 5.34 million homes in the first nine months this year, accounting for 92 percent of the target.

(SD-Agencies)