By love-89.com On September 26, the Political Bureau of the Central Committee of the Communist Party of China emphasized that housing is not just a matter of livelihood, but also a critical development issue that impacts the well-being of families, economic growth, and social stability. Xi Jinping, General Secretary of the Communist Party, remarked, “The housing issue is closely related to the interests of thousands of households and the overall development of society.”
At the meeting, officials discussed strategies to stabilize the real estate market and respond to public concerns, including adjustments to housing purchase restrictions and the reduction of existing mortgage rates. They also emphasized the need to refine land, fiscal, and financial policies to establish a new model for real estate development.
In recent weeks, authorities have encouraged local governments to take swift actions, implementing a “combination of policies” aimed at addressing both existing and new housing challenges. Various cities have adjusted or lifted restrictive measures to support both essential and improved housing needs. These initiatives are sending clear signals intended to bolster market stability and enhance consumer confidence.
At a press conference held by the State Council Information Office on October 18, Deputy Chief of the National Bureau of Statistics, Sheng Laiyun, reported noticeable improvements in real estate activity during the National Day holiday, with traffic and transactions at various real estate projects significantly increasing. Preliminary market statistics indicated a 102% rise in new home sales and a 205% increase in second-hand home transactions during the holiday period. “This shift is quite evident, and we have reason to believe that the real estate market will experience positive changes,” Sheng stated.
How do experts view the current trend and future prospects of the real estate market? Will homes be delivered on time? To address these burning questions, we conducted interviews.
What is the effectiveness of the recent policy measures?
Since October, sales of both new and second-hand homes have surged, with large cities witnessing a revival in land markets. Housing Minister Ni Hong explained that the recent optimization policies primarily focus on four cancellations, four reductions, and two increases:
– **Four Cancellations**: Restrictions on purchases, sales, pricing, and classifications of regular versus non-regular housing have been lifted, allowing local governments more control to adjust rules based on local conditions.
– **Four Reductions**: There will be a decrease in housing provident fund loan rates, lower down payment requirements for mortgages, reduced rates on existing loans, and diminished tax burdens for swapping old homes for new ones—aimed at easing financial pressures on residents.
– **Two Increases**: An additional one million units for village renovations and the uplift of credit limits for “white list” projects to 4 trillion yuan before the end of the year.
The impact of these policies is already becoming apparent. “Since October, we’ve seen significant growth in both new and second-hand home sales, with strong demand helping to revitalize the market,” commented Yu Xiaofei, head of the China Housing and Real Estate Research Institute at Zhejiang University.
Many are asking how beneficial the reduction in existing loan rates will be. Deputy Governor of the People’s Bank of China, Tao Ling, projected that most existing mortgage rates would see a collective reduction of about 0.5 percentage points, resulting in approximately 150 billion yuan in interest savings, benefiting 50 million households and 150 million people. For instance, in Beijing, a reduction from 4.4% to 3.55% means a monthly savings of 469 yuan for a 1 million yuan mortgage.
Regarding the cancellation of classifications for ordinary and non-ordinary homes, Assistant Finance Minister Song Qichao mentioned ongoing efforts to establish corresponding tax policies that will ease burdens on both homebuilders and buyers, thereby promoting market stabilization.
What progress is being made to ensure project delivery?
Key measures are already in place to safeguard home delivery. Reports indicate that 2.46 million units have been delivered, with certain provinces achieving delivery rates above 70%. The “white list” program for approved loans has reached 2.23 trillion yuan as of October 16.
“Conditions are now in place to include all residential development loan projects on the ‘white list,’” stated Xiao Yuanqi, Deputy Head of the Financial Supervisory Authority. Further enhancements to the project financing mechanisms aim to expedite funding release for qualifying projects, which is expected to help alleviate financial pressures on developers and boost market confidence.
Additionally, Ni Hong stressed the need to ensure delivery timelines and quality, proposing the establishment of a nationwide housing delivery information system to track each unit’s progress and oversight.
As for housing security…
With 148,000 units of affordable housing constructed in the first nine months of this year, plans are underway to provide housing for 4.5 million new residents and young people by year-end.
“Addressing housing challenges for new citizens and youth is a key responsibility of city governments,” Ni added, advocating for a balanced approach that meets market demands while securing basic housing needs, particularly through affordable rental and public housing initiatives.
Looking ahead, how do experts assess the future landscape of the real estate market?
The supply-demand dynamics in China’s real estate market are shifting significantly, with emphasis now on both maintaining existing stock and managing new construction. Yu noted that while demand is unlikely to reach unprecedented highs seen in previous years, there remains a substantial latent demand driven by population and urbanization trends.
“If we leverage the potential of roughly 1 million units from urban renovations, we could unlock approximately 100 million square meters of housing demand—representing nearly 20% of new residential sales in the first eight months of this year,” asserted Wu Jing, director of the Real Estate Research Center at Tsinghua University.
Going forward, effective execution of these policies will be critical. Ni Hong expressed optimism, stating, “By working together to implement these strategies, we can ensure that their benefits are fully realized, restoring confidence in the housing market for the people.”