To listen to the naysayers is to believe that China's real estate market is a weak link that is dragging down its economy. This view is nothing short of myopia and ignores the array of robust policies adopted by governments at various levels to maintain the market's stable and sound development.
China's recent government work report called for accelerating the fostering of a new real estate development model, a strategic move based on the major changes in supply-demand dynamics, featuring high quality, new technology, and good services.
Real estate has indeed long been a vital part of the economic landscape of the world's second-largest economy. Last year, China implemented measures including favorable mortgage terms, lower interest rates, and tax and fee reliefs, to shore up confidence and defuse risks in the sector.
Fostering a steady and healthy real estate market is necessary for economic growth. Given the urbanization process and the need for housing renovation, China's property market still has huge potential and room for development.
In promoting a new development model for the real estate market, China will focus on planning and building affordable housing, and advancing the construction of public infrastructure for both normal and emergency use and the renovation of villages in cities, said Ni Hong, minister of housing and urban-rural development, on March 9.
This year, China will renovate 50,000 old urban residential communities and over 100,000 km of urban underground pipelines for gas, water, sewage, and heating. These measures will increase the demand for the property sector.
Local authorities have been expediting the establishment of real estate financing coordination mechanisms and extending financing support to key projects.
More than 300 Chinese cities in 31 provincial-level regions have already facilitated financing channels and presented over 6,000 real estate projects on the "white lists" that are eligible for financing support. As of the end of February, commercial banks had approved such loans exceeding 200 billion yuan (28.2 billion U.S. dollars).
Different cities have been encouraged to tailor policies to their specific market and population contexts. For example, Shanghai has eased restrictions on house purchases for individuals without local household registration certificates.
Putting in place a new development mode for the real estate market is the fundamental solution to the difficulties in the sector and promoting a stable and healthy real estate market. As policies and measures continue to yield outcomes, the new development model for the real estate sector will by all means fortify the resilience of the Chinese economy, contributing to its sustained and quality growth.
