Rattled by the potential economic fallout from millions of unsold homes, China wants migrant workers to buy properties in smaller cities and ease the burden on a real estate sector that makes up about 15 per cent of the country's economic growth.

The move underscores Beijing’s concerns over a stock of some 1 billion square metres of vacant housing – around 13 million homes or enough to house the population of Australia – and the broader knock-on effect of any defaults by struggling property developers as the world’s second-largest economy grows at…