Affordable rental home construction to fall in 2024

Growth in affordable rental housing (ARH) is set to slow this year.

By early April, 24 provincial governments had unveiled their ARH construction targets for 2024.

• All but three set targets lower than in 2023.
• Fujian and Jiangxi, for instance, cut their goals by over 50%.

ICYDK: Xi Jinping flagged the importance of affordable rental housing in late 2021, but it took on a new urgency last year.

• Affordable housing, along with urban village renovation and dual-use leisure-emergency facilities, make up the “three major projects,” – areas where authorities intend to ramp up construction activity to support the beleaguered property sector.

The cutback in construction targets is disappointing, but expected:

• By end-2023, ARH stock had reached 70% of the 14th Five-Year Plan's target of 8.7 million new ARH units nationwide, meaning localities are under less pressure to build in 2024 and 2025.

Get smart: ARH construction relies heavily on local government subsidies.

• But with local officials now under pressure to rein in debt, they have little incentive to accelerate further ARH construction, given that they are comfortably ahead of construction targets.
• That’s yet more lousy news for many construction-related sectors.