Steps afoot to remedy property slump

After property's traditional peak sales season in March and April, the momentum of China's real estate market has been showing signs of weakening of late, raising the need for more forceful policy support to prop up sustainable recovery in the second half, analysts said.

Amid changes in the supply-demand relationship in the sector, policymakers should now focus on both stimulating demand and improving the quality of supply to achieve long-term stability, they added.

The average new home price in 70 cities monitored fell 0.22 percent in May compared to the previous month, while the second-hand market price declined by 0.5 percent, according to data released by the National Bureau of Statistics in June.

"Both the figures showed the largest single-month drops so far this year," said Chen Wenjing, director of policy research at the China Index Academy.

The State Council made it clear during an executive meeting in mid-June that policymakers will intensify efforts to "stabilize the property market and halt its decline" through multipronged measures.

A comprehensive nationwide survey will be conducted on land parcels already allocated for real estate development and ongoing construction projects. Existing policies must be further optimized to enhance their systematic implementation and effectiveness, it was announced at the meeting.

"China's real estate market remains in the midst of a broader adjustment process, with market confidence still in the repair stage and supply-demand dynamics yet to be fully addressed," said Fu Linghui, a spokesman with the National Bureau of Statistics.

"Ensuring stabilization of the housing sector and reversing the recent downward trend will require continued and concerted efforts," Fu said.

Experts cautioned that the property industry's extensive links with other sectors — such as construction, manufacturing, finance and consumer spending — underscore its outsized importance in driving broader economic growth and development.

"The policymakers' directive to intensify efforts in implementing stabilizing measures points to a keen awareness of the need to address the market's recent volatility," said Chen.

Property researcher CRIC said that in the first half, local governments across the country introduced 362 policy measures to stabilize the real estate market. They have collectively purchased idle land parcels of around 9,553 hectares, with a total funding allocation of 469.6 billion yuan ($65.6 billion).

Li Yujia, chief researcher at the residential policy research center of the Guangdong Planning Institute, said that first-tier cities like Beijing and Shanghai still have room for easing purchase restrictions, which could potentially unlock over 10 percent in additional housing demand.

The betterment of property conditions in these economic hubs will have a ripple effect on driving the stabilization and recovery of housing markets across smaller cities, Li said, adding that these lower-tier cities could also extend tax incentives for residential purchases and implement programs to renovate urban villages and dilapidated housing.

While demand-side measures are crucial, equally important is the need to enhance the supply-side through improved housing quality and better alignment with evolving residential preferences, analysts said.

Released by the Ministry of Housing and Urban-Rural Development, the upgraded national standards for residential projects came into effect on May 1, covering seven aspects including living environment, building space, structure, indoor environment and building equipment.