The Political Bureau of the Central Committee of the Communist Party of China held a meeting on July 24th to analyze and study the current economic situation and deploy economic work for the second half of the year. The meeting pointed out that it is necessary to effectively prevent and resolve risks in key areas, adapt to the new situation of significant changes in the supply and demand relationship in China's real estate market, and adjust and optimize real estate policies in a timely manner. This indicates that there is marginal optimization space for policies introduced during the long-term overheating stage of the market in the past. Real estate policies will improve policy accuracy, and both rigid and improved housing demand will be better supported. The supply and demand relationship in China's real estate market has undergone significant changes. In the past, the real estate market was in short supply, and the market had been overheating for a long time. Funds had excessively entered the real estate industry, and companies preferred to expand their scale, forming a "three high" model of "high leverage, high debt, and high turnover". House prices rose too quickly. Nowadays, the overall supply shortage stage in China's real estate market has basically ended, and there has even been a situation of oversupply in some parts. The real estate market in China is transitioning from rapid development to a stable development stage with a smaller total volume and slower speed. It should be noted that China's real estate market still has considerable scale and potential. According to data from the National Bureau of Statistics, in 2021, the sales of commercial housing in China reached 18193 billion yuan. In 2022, the national sales revenue of commercial housing reached 13330.8 billion yuan. The industry generally believes that the sales of commercial housing will reach its peak in 2021 and then begin to decline. However, some institutions predict that the sales of the real estate market will remain stable at around 12 trillion to 13 trillion yuan. This is still a big market. The continuous advancement of urbanization in China, with a large number of farmers entering cities, and frequent population mobility brought about by economic and social development, will continue to generate a large demand for housing. The demand for housing by the people is shifting from "yes" to "no good", and their expectations for living quality are constantly increasing. The potential for housing improvement such as exchanging small for large and old for new is also very considerable. In addition, the development of old residential area renovation, urban village renovation, housing leasing, as well as home consumption and residential service consumption derived from housing, still have broad prospects in the real estate market. When the development stage of the real estate market changes and the market supply and demand relationship is adjusted, the relevant policies of real estate regulation should also be adjusted accordingly. For a period of time, in response to the changes in the real estate market, various regions and relevant departments have implemented policies based on the city and precision, adjusting and optimizing real estate policies. Many cities have lifted restrictive measures such as purchase restrictions during the overheating stage and introduced relevant support measures to meet rigid and improving needs. The relevant departments have introduced policies and measures to reduce the financial pressure on home buyers, such as lowering the interest rate of housing loans, giving Personal income tax rebate to "sell old and buy new", and reasonably reducing the fees for housing sales and rental brokerage services, which will actively guide the release of housing consumption potential. Real estate regulation will further improve policy accuracy. Adjust and optimize measures that are no longer suitable for the new stage during the overheating stage. On the demand side, the focus is on meeting the demand for rigid and improved housing, reducing purchasing costs, and promoting reasonable housing consumption. On the supply side, the focus is on better meeting the reasonable financing needs of real estate enterprises, effectively implementing relevant financial support, and further handling the risks of trapped real estate enterprises. In addition, Baojiao Building
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：economic daily
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