Gradual rationalization of the real estate market

The National Bureau of Statistics announced that based on the situation in May, the overall real estate market is stable, but it is still facing multiple factors that have affected real estate development and construction, resulting in a relatively sluggish market that is slowly recovering.

As the economy continues to improve, stable policies in the real estate market are showing results, and market expectations are improving, indicating a gradual stabilization of the real estate market.

The uniqueness of the real estate market lies in its dual role as a major driving force behind economic growth and its susceptibility to macroeconomic expectations. Therefore, it becomes a key factor influencing macroeconomic growth.

The real estate market should not be used as a short-term means to stimulate the economy by creating a buying frenzy and driving inventory reduction. This is because in many major cities, housing prices are already high compared to local incomes. A buying frenzy would distort supply and demand in the short term, leading to pulsating price increases, which is unfavorable for the healthy and sustainable development of the real estate market.

Additionally, with population growth slowing down and urbanization rates continuously increasing, relatively stable demand does not support further price increases. Therefore, the real estate market must maintain stable and healthy operations and avoid drastic fluctuations.

The government needs to use countercyclical adjustments to stabilize and promote macroeconomic growth, improve market expectations, and prevent negative expectations caused by the downward trend in employment and income, which may cause potential homebuyers to postpone their purchasing decisions. We should also promote orderly urban renewal. Currently, many old and dilapidated neighborhoods still exist in most cities, with poor living conditions, and they are the main drivers of replacement demand. However, urban renewal should avoid hasty and uncoordinated approaches.

We should encourage the release of improvement and rigid housing demand, remove unreasonable restrictive policies, and prevent speculative investment. In larger cities, innovative financing methods should be explored to increase the supply of public rental housing and address housing issues for new residents. At the same time, we should continue to promote the urbanization of migrant workers and provide comprehensive social security services such as education and healthcare.