Policies to curb real estate demand are bearing fruits

China’s real estate market has entered a new stage this year. In the first seven months, the authorities adopted policies to curb the unreasonable real estate demand. Till the end of July, more than 50 prefecture- and higher-level cities and 10 county level-cities had issued real estate policies to curb demand. But on the other hand, the authorities have emphasized the importance of adequate supply to stabilize the supply-demand relationship.

In May, the Ministry of Housing and UrbanRural Development required first- and secondtier cities to devise their respective housing development plans for the 2018-22 period before the end of this year, for which they have to increase the supply of middle- and lowpriced housing, and land for rental and jointproperty housing.

Metropolises such as Beijing, Shanghai and Shenzhen have already issued their housing development plans.

In the meantime, a new round of institutional reform to promote innovation in the real estate market, including the establishment of a national network for real estate registration, has been propelled.

With the financing channels for rental housing progressing well, the authorities have issued regulations on rental housing asset securitization and allowed insurance funds to enter the long-term rental apartment market to facilitate the establishment of a long-term real estate mechanism.

Since the beginning of this year, policies to control financing in the real estate sector have been further tightened, which, along with the tightened industrial credit and loan policies, has increased the financing pressure on realty developers. This in turn has made realty enterprises realize they have to improve efficiency to increase turnover.