National Bureau of Statistics: Recent Real Estate Market Shows Increasing Positive Changes Under the Policy Package Combative Measures
On January 17th, a press conference was held by the State Council Information Office, at which Kang Yi, Director of the National Bureau of Statistics, introduced the operation of the national economy in 2024.
Kang Yi stated that in response to the complex situation in the real estate market in 2024, the Central Political Bureau meeting on September 26th explicitly proposed to “promote the stabilization of the real estate market by reversing the decline.” Multiple departments have moved quickly to improve policies in land, fiscal and tax, and finance,取消限购,限售,限价和普通住宅与非普通住宅的标准. They have also lowered the interest rate on housing provident funds, the down payment ratio for housing loans, the existing loan interest rates, and the tax rate for purchasing replacement housing, forming a comprehensive policy package. Different regions have also implemented targeted measures tailored to their specific cities, showing precise application of policies. The effects of these policies are continuously emerging and manifesting in several aspects.
Firstly, market transactions are becoming more active. The comprehensive policies have effectively lowered the threshold for residents to purchase houses, reduced the pressure of repaying loans, and increased residents’ willingness to purchase houses. Real estate sales have improved. In the fourth quarter, both the sales area and the sales amount of new commercial houses have achieved positive growth. Based on monitoring sales in 40 key cities, the sales area and sales amount of new commercial houses in December increased by 0.3% and 4.1% year-on-year, respectively.
Secondly, housing prices are gradually stabilizing. In December, among 70 large and medium-sized cities, there were 23 cities where the sales prices of new commercial residential buildings rose month-on-month, and 9 cities where the prices of second-hand houses rose month-on-month. Specifically, the sales prices of new commercial residential buildings in first-tier cities rose by 0.2% month-on-month, which was the first increase since June 2023; the sales prices of second-hand houses rose by 0.3% month-on-month for three consecutive months. The sales prices of new commercial residential buildings in second-tier cities remained flat after falling in the previous month. The month-on-month decline in new commercial residential building prices in third-tier cities has been narrowing for four consecutive months. In terms of year-on-year comparison, the decline in commodity residential building prices in all cities has also been narrowing.
Thirdly, market expectations continue to improve. The superposition of policy effects has led to continuous improvement in major indicators of the real estate market, driving market confidence to gradually increase. In December, a monthly housing price questionnaire survey conducted among 70 large and medium-sized cities showed that 69.3% of respondents believed that new commercial residential building prices would remain stable or rise in the next six months, an increase of 0.8 percentage points from the previous month.
Fourthly, other related fields in real estate have also shown improvement. The recovery of the real estate market has driven the improvement of related industries. In December, the business activity expectation index of construction industry rose by 1.5 percentage points from the previous month for three consecutive months. With the improvement of commercial housing transactions, demand for decoration and renovation is gradually being released, and sales of furniture and building materials are improving as well. In December, retail sales of furniture from units above a certain size increased by 8.8% year-on-year for four consecutive months, while sales of construction and decoration materials increased by 0.8% for two consecutive months.
Kang Yi stated that overall, there have been many positive changes in the real estate market under the combined effects of policies recently, and market confidence is gradually improving. With effective implementation of existing and incremental policies, the real estate market is expected to continue to improve in the next stage. In the medium to long term, China’s new urbanization process is not yet complete, and there is still potential demand for first-time buyers and home improvement buyers. The demand for safer, more comfortable and environmentally friendly housing will continue to increase as well as a new model for real estate market development will gradually be established which will contribute to its stable and healthy development.
