China's real estate market is witnessing significant shifts as new policy measures aim to reduce the oversupply of commercial housing and enhance the quality of new developments. In April 2024, commercial housing for sale in the Chinese mainland surged to 746 million square meters, surpassing the previous peak of 739 million square meters from over a decade ago.
Responding to this trend, the Communist Party of China (CPC) Central Committee's Political Bureau held a meeting on April 30 to implement strategies focused on decreasing housing stock and upgrading the quality of new housing projects. These measures are part of a broader initiative to establish a new model for real estate development, fostering high-quality growth within the sector.
On May 17, the People's Bank of China and the National Financial Regulatory Administration introduced a comprehensive set of policy measures to support the real estate market. Key initiatives include:
- A 300-billion-yuan re-lending facility for government-subsidized housing, aimed at converting commercial housing stock into more affordable options.
- Reduction of minimum down payment ratios for individual housing mortgages, making homeownership more accessible.
- Elimination of the lower limit on mortgage rates for individuals, providing greater flexibility in financing.
- A decrease in loan rates for housing provident funds by 0.25 percentage points across all terms.
These policy implementations have already begun to yield positive effects in select cities, indicating a promising start. The immediate objective is to alleviate financial pressures on real estate developers and promote healthier capital operations within the industry. In the long run, these measures are expected to create a more balanced housing supply system, facilitating the settlement of rural migrant workers in urban areas and supporting their transition into genuine \"new urban residents.\"
Reference(s):
China's real estate policy combination shows preliminary effects
cgtn.com
