(Yicai) Aug. 19 — China’s State Council said it will implement effective new measures to enhance the stabilization of the real estate market and halt its decline, including combining urban renewal efforts with the renovation of urban villages and dilapidated housing and using a multi-pronged approach to release improvement demand.
The meeting of China’s cabinet yesterday shows that the policy tone of “stabilizing and halting the decline” remains unchanged, said Guo Lei, chief economist at GF Securities. The mention of “taking effective measures” to some extent opens up room for further policy imagination, Guo added.
The Politburo’s July 30 meeting did not include a separate discussion on real estate policies, leading to mixed market expectations, Guo noted. The market is still slowing in the short term, with sales, prices, investment, and other indicators declining by varying degrees last month, Guo added.
Various Chinese regions have continuously optimized housing market policies to stabilize and halt decline, while also making efforts to accelerate urban renewal, driving the optimization of urban structures and the transformation of development momentum. For example, Beijing allowed eligible families to buy multiple homes outside the Fifth Ring Road without restrictions on Aug. 8.
The continuous optimization of real estate market policies has boosted market confidence, according to Chen Wenjing, director of policy research at the China Index Academy. Beijing’s new policies send a clear signal, and cities like Shanghai and Shenzhen are expected to follow suit, Chen noted.
Stabilizing the market and halting its decline remain the core objectives of real estate policies, Chen said, adding that such efforts will continue to be optimized in various regions.
Urban renewal has become a key focus in promoting high-quality urban development, with supporting policies to likely speed up the implementation of relevant projects in the second half of the year, Chen said. Local governments will also continue to focus on renovating urban villages and dilapidated housing, as well as effectively implementing existing policies, such as using special bonds to support the acquisition of existing housing inventory, Chen added.
In addition, the State Council’s latest meeting laid out plans for boosting consumption and investment, emphasizing the need to continuously unlock consumption potential, systematically remove restrictive measures in the consumption sector, and accelerate the cultivation and growth of new drivers, including service consumption and new types of consumption.
Efforts will also be intensified to expand effective investment, leveraging major projects to play a leading role. The Chinese government aims to adapt to changing demand by directing more investments toward people and improving livelihoods, while actively encouraging private investment.
Expanding consumption cannot rely solely on short-term stimulus, but it must involve adjustments, such as reforms in institutional mechanisms, to achieve stable growth and lift the consumption rate, according to Liu Yuanchun, president of Shanghai University of Finance and Economics. Ensuring household income, maintaining healthy household balance sheets, strengthening the social security system, and improving livelihood are all crucial measures for boosting consumption, Liu said.
Editor: Martin Kadiev