Market News International:

How does the National Bureau of Statistics analyze the current real estate market performance? Have real estate-related indicators bottomed out? And what further policies are expected to promote the real estate market stabilization and recovery?

Fu Linghui:

Thank you for your questions. The real estate market is a hot topic that attracts a lot of attention. The Party Central Committee attaches great importance to the healthy development of the real estate market. At the meeting of the Political Bureau of the Central Committee on Sep. 26, it was emphasized that multiple measures should be taken to "promote the stabilization and recovery of the real estate market." Relevant departments have been working quickly to improve policies related to land, taxation and finance, focusing on the implementation of stock policies and the introduction of incremental policies, thus creating a comprehensive approach. As these policies are gradually implemented, confidence in the real estate market has been boosted and market transactions have become more active, leading the real estate market moving toward stabilization and recovery.

On the sales side, market vitality has improved significantly. Down payment ratios and mortgage interest rates have been lowered. Measures restricting house purchases, sales and pricing have been lifted, effectively ensuring people's needs for basic and improved housing. In October, the real estate transactions accelerated. From January to October, compared to the decline in the first nine months, the year-on-year decline in sales area and sales value of new commercial housing narrowed by 1.3 and 1.8 percentage points, respectively. This marks the greatest monthly improvement for the year. According to the sales situation in 40 key cities monitored, improvements are more significant in second-tier cities that previously experienced with greater price corrections. In October, monthly sales area saw growth and sales value's decline narrowed significantly. Driven by gradually stabilized prices, the sales value of first-tier cities in October realized growth. According to data from relevant departments, transactions of second-hand houses improved remarkably in October.

In terms of the prices, housing prices showed initial signs of stabilization. In October, among 70 large and medium-sized cities, four more cities, compared to the previous month, saw monthly growth in sales prices with new commercial housing, and eight more cities saw monthly growth in prices of second-hand houses. Among first-tier cities, the month-on-month decrease in sales prices of new commercial housing narrowed, and sales prices of second-hand houses ceased to drop and started to rise in comparison to the previous month. For second- and third-tier cities, the monthly decrease in sales prices of new commercial housing and second-hand houses narrowed to varying degrees. The recovery in sales and stabilization of prices have led to an improvement in the cash flow of real estate enterprises. In the first 10 months, the year-on-year decrease in funds raised by real estate development enterprises narrowed by 0.8 percentage point compared to the first nine months. Closely related to property sales, decrease in earnest money, advance payments and personal mortgage loans all narrowed by 2.1 percentage points.

In terms of expectations, the real estate market sentiment has improved. According to PMI data, the business activity index for the real estate sector saw an improvement of 2.5 percentage points in October compared to the previous month, and the market expectation index rebounded by 1.8 percentage points, indicating an improvement in the climate level of the real estate sector as well as in marketplace expectations. In October, a survey on property development enterprises and real estate agencies across 70 large and medium-sized cities showed that the proportion of surveyed employees anticipating stable or rising sales prices for both new commercial housing and second-hand homes in the next six months further grew from the already increased proportions in September by 17.6 and 15 percentage points, respectively. This indicates that related business institutions have a growing confidence in the real estate sector.

In general, a package of measures to stabilize the real estate market is proving effective. Positive changes in the real estate sector emerged in October. As the effects of these policies continue to unfold, the momentum driving the stabilization of the real estate market will be enhanced. Therefore, we are optimistic on the future development of the real estate sector. However, it should be noted that, after long-term rapid expansion, the real estate market has entered a new stage of development and will pivot from quantitative expansion to qualitative improvement to better satisfy people's diverse housing needs. Moving forward, we will diligently implement the decisions and arrangements of the CPC Central Committee and the State Council, adapting to the reality of profound changes in the supply and demand relationship of the real estate sector. We will strictly control expansion, optimize existing resources and improve the quality of housing. We will coordinate efforts to refine policies regarding land use, taxation and financing to quickly foster a new development model for the real estate sector and to promote the steady and healthy development of the sector. Thank you.