Housing supply in order to stabilize the real estate sector

Housing supply, in order to stabilize the real estate sector

China will provide about 2.4 million subsidized rental housing units this year, an official with China's top house regulator said on Thursday.

A key task the country has set itself is ensuring the stability of the real estate sector and creating an adequate supply of housing to meet demand.

Therefore, Wang Menghui, Minister of Housing and Urban-Rural Development, told a press conference by the State Council Information Office that the reform will seek to improve the housing supply structure.

Regulations must be stable, consistent, accurate and coordinated. While maintaining the industry's long-term mechanism and strong demand, it will meet the reasonable housing demand for improving living conditions, promote the healthy development of the industry, form a virtuous circle, and ensure the stability of land and housing prices. and market expectations, Wang said.

With the joint efforts of all parties, China's real estate market was generally stable last year, and the consensus that "houses are for living, not for speculation" is forming.

Ni Hong, deputy minister of the Ministry of Housing and Urban-Rural Development, said that in 2021, the transaction area of commercial housing across the country will be about 1.565 billion square meters, a year-on-year increase of 1.1%.

Growth in house prices has been slowing. In 2021, the average transaction price of new houses in 70 large and medium-sized cities across the country will increase by 2%, and the average transaction price of second-hand houses will increase by 1%, down 1.7 percentage points and 1.1 percentage points respectively.

According to data from the National Bureau of Statistics, in January, the prices of new houses in 50 of the 70 major cities rose year-on-year, and the prices of existing houses rose in 39.

By 2021, real estate development investment will increase by 4.4% year-on-year to RMB 14.8 trillion ($2.33 trillion), of which residential investment will increase by 6.4%.

"The stable property market performance also proves that a long-term mechanism for the property market is taking shape," Ni said.

Real estate cannot be seen as a tool for short-term economic stimulus. He said that guiding and adapting measures to local conditions can promote the healthy development of the industry.

"To do this, the debt defaults of several property developers and the overdue delivery of property projects should be addressed," Ni said.

This will ensure that buyers deliver their homes in an orderly manner, which will help protect people's livelihoods and maintain stability. Ni said debt disposal and home delivery will be carried out in accordance with laws and market principles to ensure social stability and the legitimate rights and interests of home buyers.

Zhang Dawei, chief analyst at Centaline Property, said he was pleased to see the real estate industry will play an active role in stabilizing the economy.
At the same time, vigorously increase the supply of affordable rental housing.

"We can build 2.4 million new units (apartments or rooms) this year, build another 100,000 public housing units, and renovate 1.2 million old urban apartments," Wang said.

He also said that the development of the long-term rental housing market will be accelerated.

Last year, 942,000 subsidized rental housing units were added in 40 Chinese cities.

In order to increase the number of new affordable rental housing units to 2.4 million this year, the real estate supervision department requires the implementation of supporting measures in terms of land, approval procedures, central financial subsidies, and tax incentives.

"I believe that if young people in a city are full of hope, the city itself will be full of hope. This principle applies to China," Ni said.

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