Beijing, December 12th (Xinhua) - The Central Economic Work Conference was held in Beijing from December 11th to 12th. This meeting emphasized the need to coordinate and resolve risks in real estate, local debt, and small and medium-sized financial institutions, accelerate the construction of affordable housing and other "three major projects", as well as accelerate the construction of new models for real estate development. Analysis suggests that this releases three major signals for China's real estate market regulation next year.

Firstly, actively and prudently resolving real estate risks remains a key focus, and it is necessary to meet the reasonable financing needs of real estate enterprises with different ownership equally.

The meeting proposed to coordinate and resolve risks such as real estate, local debt, and small and medium-sized financial institutions, crack down on illegal financial activities, and firmly hold the bottom line of preventing systemic risks. Actively and prudently resolving real estate risks, meeting the reasonable financing needs of real estate enterprises with different ownership equally, and promoting the stable and healthy development of the real estate market.

Yan Yuejin, the research director of E-House Research Institute, analyzed that risk prevention and resolution emphasize the concept of "coordinated resolution", which indicates that the current resolution of real estate risks needs to be more systematic and comprehensive, especially in the areas of real estate, local debt, small and medium-sized financial institutions, and other risks. This problem should be understood with a holistic approach rather than an isolated approach. The real estate risk issue is complex, and new ideas are needed for related work.

Currently, some real estate companies are facing phased difficulties and tight liquidity, and market expectations need to be further stabilized. Cai Zhibing, Associate Professor of the Economics Teaching and Research Department of the Central Party School (National School of Administration), told China News Agency reporters that the top priority is to improve the accuracy of regulatory policies for real estate enterprises, and to implement different types of regulatory measures for different types, degrees, and causes of problems in real estate enterprises.

In the view of Chen Wenjing, the Director of Market Research at Zhongzhi Research Institute, resolving risks in real estate enterprises still requires promoting the recovery of "self growth" of enterprises. Substantive recovery of market sales is the key to improving the company's financial situation, and the improvement of the sales market still requires continued support from demand side policies. It is expected that first tier cities will continue to optimize their purchase restriction policies in 2024, and the number of core second tier cities that will cancel purchase restriction measures will increase. More cities may promote the release of housing demand through issuing housing subsidies and other means.

Secondly, focus on the supply side and directly address long-term issues such as supply-demand mismatch.

The meeting proposed to accelerate the construction of affordable housing, the construction of public infrastructure for both emergency and basic needs, and the renovation of urban villages. Improve relevant basic systems and accelerate the construction of new models for real estate development.

"The three major projects are not only the focus of the new model, but also the focus of real estate's steady progress." Li Yujia, Chief Researcher of the Housing Policy Research Center of Guangdong Provincial Urban Planning Institute, believes that these three projects focus on the long-term healthy operation and stable growth of real estate, and strive to solve long-term problems such as structural problems, supply-demand mismatch, and demand gaps. Essentially, they all focus on the supply side to match demand and combine it with expanding domestic demand in the real estate industry.

The renovation of urban villages addresses the housing needs of new citizens, young people, and migrant populations, mainly through low-cost, job and housing balanced rental housing needs; Affordable housing is to solve the problem of the gap in demand for commercial housing, which is the distribution type security needs of households without registered residence, talent groups, and wage earners; The "dual use of emergency and emergency" public infrastructure addresses the demand for supporting facilities for residential safety in the new era.

Since the beginning of this year, the central government has repeatedly emphasized the importance of the "three major projects" in important meetings, and the executive meetings of the State Council have also reviewed and approved relevant guidance opinions. Chen Wenjing analyzed that this meeting once again emphasized the acceleration of the three major projects, and it is expected that the implementation of supporting policies will be accelerated next year.

Thirdly, following the principle of "standing first and then breaking", explore new models.

This meeting clarified the need to improve relevant basic systems and accelerate the construction of new models for real estate development. Yan Yuejin believes that this fully demonstrates the importance and urgency of establishing a new model and system for real estate development. To establish a new development model for real estate, it is necessary to "establish first" rather than "break through first". The mention of improving relevant basic systems this time also indicates that in the future, we will gradually explore some basic systems in the aspect of "establishing first and then breaking down".

The current supply and demand relationship in the real estate market has undergone significant changes. Cheng Shi, Chief Economist of ICBC International, believes that in the short term, if housing prices exceed expectations, it is still necessary to focus on credit risk management for real estate enterprises, and be wary of the transmission of liquidity and debt risks to systemic risks. In the long run, the recovery of the real estate market will be a slow and gradual process, and strong support policies are still needed. At the same time, we will actively promote supply side reforms in the real estate industry, eliminate distortions, and achieve supply-demand balance. (End)

(Source: China News Network)