Red Star News:

What are your thoughts about the real estate market trends in November? What effect does the recently promoted new policies have, and is this effect reflected in the data? Thank you.

Fu Linghui:

Thank you for your questions. The real estate sector is not only related to people's livelihoods but also economic development. It is of great concern to all parties involved. Faced with new changes in the real estate market, the meeting of the Political Bureau of the CPC Central Committee on September 26 emphasized the need to "curb the downturn of the real estate market." Multiple departments have stepped up efforts to improve land, fiscal, tax and financial policies;to cancel restrictive measures such as purchasing restrictions, sales restrictions, price limits and standards for ordinary and non-ordinary residential properties; and to lower interest rates, down payment ratios, and taxes and fees in transaction links. These measures have released housing demands and reduced housing costs, achieving significant results. October saw positive changes in the real estate market. In November, property transactions became more active, market expectations improved, and the market continued to move towards curbing the decline and stabilizing.

First, market transactions tend to be active. With the optimization and adjustment of policies, the threshold required for purchasing a house has been lowered and the burden of purchasing a house has been reduced. Residents are supported with buying their first homes and improving their housing situation. Since October, real estate transactions have generally rebounded, and sales of newly built commercial housing saw further improvements in November. From January to November, compared to the decline in the first ten months, the year-on-year decline in sales area and sales value of new commercial housing narrowed by 1.5 and 1.7 percentage points,respectively. Both sales area and sales value in November achieved positive growth. In terms of the sales situation in the 40 key cities that are monitored, from January to November, the year-on-year decline in the sales area and sales value of newly built commercial housing narrowed by 1.8 and 2.1 percentage points compared to the decline in the first ten months. Among them, monthly growths in November were 10.2% and 6.8%, respectively.

Second, there are more changes in housing price stabilization. As the effects of various policies aimed to curb the downturn of the real estate market become apparent, market transactions have become more active and transaction prices have shown signs of stabilizing. In November, among 70 large and medium-sized cities, sales prices with new commercial housing rose in ten more cities compared to the previous month, and two more cities saw monthly growth in prices of second-hand houses. In terms of sales prices of newly built commercial housing, the month-on-month decline in first-tier cities has stabilized, while the declines in second-tier and third-tier cities have narrowed by 0.4 and 0.2 percentage points respectively, compared with the previous month. In terms of sales prices of second-hand housing, first-tier cities saw a month-on-month increase of 0.4%, while second-tier and third-tier cities saw a month-on-month decrease of 0.2 and 0.1 percentage points respectively, compared with the previous month.

Third, market expectations continue to improve. Improved real estate market transactions and price stabilization have led to improved market expectations. The PMI survey shows that the index of housing market expectations in November rebounded by 1.1 percentage points compared to the previous month. A survey on real estate market entities showed that, in November, among real estate developers and intermediary agencies in 70 large and medium-sized cities, 68.5% and 57.1% of the respondents expect sales prices of newly built commercial housing and second-hand housing to remain stable or to increase in the next six months. This indicates that expectations of market entities are stabilizing.

In general, with various policies, the real estate market in November showed many positive changes. Market confidence has been boosted, the momentum for stopping the decline and increasing stabilization has been strengthened, with the outlook expected to continue improving. In the next stage, we must conscientiously implement the decisions and arrangements of the CPC Central Committee and the State Council, deeply understand the profound changes in the dynamics of supply and demand in the real estate market, strictly control new developments, optimize existing stock, and improve quality, as well as improve the housing system featuring multiple suppliers and various channels of support that encourages both housing rentals and purchases. We must move faster to foster a new development model for the real estate sector, to better meet people's demand for buying their first home or improving their housing situation and to promote the stable and healthy development of the real estate market. Thank you.