China's latest reform of its housing provident fund system is expected to further unleash residential property-related consumption potential and help the housing industry gain a more solid footing in its recovery, experts said, as the sector remains in the midst of a broader adjustment.
Their comments came after the State Council, the country's Cabinet, issued a decision on Tuesday to amend the regulations on housing provident fund management, with the changes set to take effect on Sept 20.
The fund, a long-term housing savings program made up of mandatory monthly contributions by employers and employees, can be tapped for a wider range of housing-related expenses under the revised rules, which also allow flexible workers to participate voluntarily and facilitate cross-regional account transfers.
Lou Feipeng, a researcher at Postal Savings Bank of China, said the revision is the most extensive since the regulations were introduced in 1999.
"By easing the financial burden on homebuyers, the changes could release pent-up demand and help shore up market confidence in the near term," Lou said, adding that over time the reform will help promote a healthier balance between renting and buying, and spur spending linked to existing housing stock.
