During a recent interview, Li Yujia, the chief researcher at the Housing Policy Research Center of the Guangdong Urban Planning Institute, commented on the significant shift in real estate market policies. He stated, “With a determined focus on ‘winning,’ this change reflects a commitment to thoroughly revitalize existing assets until inventory pressures are alleviated—there will be no backing down until the goals are met.”
On October 17, Ni Hong, the Minister of Housing and Urban-Rural Development, confidently declared at a press conference, “We are certain we can win this battle to ensure housing delivery.” This statement marked a shift from previous official language, which referred to “fighting to ensure housing delivery.”
What does it mean to “win”? Ni summarized the new policy approach with a framework of “four cancellations, four reductions, and two increases.” Notably, the “two increases” present the most innovative aspects. The first is to add 1 million units via urban village renovations and the transformation of dilapidated housing through monetized resettlement strategies. The second involves increasing the credit scale for “white-list” projects to 4 trillion yuan by the end of the year, alongside further optimizing the financing mechanisms for these projects.
Experts believe these “two increases” directly address critical pain points in the current real estate market. Zhang Bo, director of the 58 Anjuke Research Institute, analyzed the provision of monetary support for housing demolition and relocation instead of focusing on building new resettlement houses. This approach aims to directly stimulate effective demand, thereby alleviating the surplus of existing homes on the market.
The 4 trillion yuan initiative serves as a solid financial guarantee for ensuring housing delivery. Li Yujia emphasized that expanding the coverage of the “white list” and streamlining the process from the “white list” to financing will assist in easing the funding strain for real estate companies, ultimately aiding in risk elimination and restoring public confidence in the industry.
As one of the pillar industries of the national economy, real estate encompasses a vast supply chain, touching on housing, land, fiscal policy, and finance. The Central Political Bureau meeting on September 26 explicitly called for measures to stabilize the declining real estate market, sending a powerful signal for stabilization efforts.
At this press conference, key officials from the Housing Ministry, the Finance Ministry, the Ministry of Natural Resources, the People’s Bank of China, and the National Financial Regulatory Administration were present, reflecting a unified and coordinated approach to addressing these challenges.
Li Yujia pointed out that the collaboration to efficiently utilize idle land, through special bonds and stricter regulations on land disposal and local government debt, is crucial. This initiative, along with supportive measures to create a favorable market environment for secondary land sales, will likely enhance cash flow in the real estate sector.
Observations from “Sanli Cang” indicate a multi-faceted effort to boost the housing market. The four cancellations include lifting restrictions on purchases, sales, and pricing, as well as standards for ordinary and non-ordinary residences. The four reductions involve lowering mortgage interest rates, down payment ratios, existing loan interest rates, and tax burdens for upgrading homes. Various government departments and local authorities have already begun to implement these measures.
The proactive policies are yielding noticeable results. According to data from the Housing Ministry, since the end of September, the volume of viewings, visits, and transactions for new homes has significantly increased, with second-hand home transactions also on the rise. Notably, first-tier cities have shown consistent recovery since October.
Monitoring by real estate research firm Ke Rui revealed that during the National Day holiday, the area of subscribed homes in 22 key cities rose by 26% year-on-year and by 12% compared to the previous month. In particular, subscription areas in Beijing, Shenzhen, and Guangzhou increased by 42% year-on-year.
Ni Hong believes that with the implementation of these series of policies and after three years of adjustments, the Chinese real estate market has begun to stabilize.
