Housing system should cover all residents
China is observing the 40th anniversary of reform and opening-up, but its real estate reform is just two decades old, as the housing reform started only in 1998. Since the launching of reform and opening-up, China’s average urban residential area has increased from 6.7 square meters in 1978 to more than 38 square meters in 2018, and average rural housing area has increased from 8.1 square meters in 1978 to 45 square meters in 2016. In 1978, the real estate sector’s contribution to China’s GDP was essentially nil, but by 2017 it had grown to 6.5 percent of GDP – the figure had reached 6.8 percent by the end of October 2018. This was made possible by overall reform and opening-up, especially the housing system reform.
The real estate sector, however, is also facing many problems, which means reform should be further deepened to ensure the steady and sustainable development of the real estate market.
The real estate market was over-heated before August this year. It began to cool down in September, as the housing sales volume has shown negative growth from August to October and the new construction rate has remarkably declined since August.
Besides, the gap among regional real estate markets is gradually narrowing and the realty market in some hotspot cities is cooling down. But the realty markets in some cities, particularly those in the central and western regions, seem to be warming up. And housing prices in city clusters are remarkably higher than in single cities.