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Key move at critical moment for property market

China Daily | Updated: 2024-05-20 07:45

Residential buildings pictured in Changsha, Central China's Hunan province on May 9, 2021. [Photo/VCG]

On Friday, the People's Bank of China issued several important new real estate policies, including reducing the down payment ratio for home purchases to 15 percent, lowering the interest rates for provident fund loans and mortgages, and providing loans to local governments to buy unsold apartments for indemnificatory housing. The "heavyweight" policies have been hailed as "historic" steps to lift the property sector.

It should also be noted that besides timely policy adjustment, it is crucial to establish a more mature and perfect market mechanism in the long run, and the relationship between government and real estate enterprises needs to become more transparent, open, and market-oriented, thus making the price mechanism more fair in the housing market. Besides market-orientation, it is also necessary to provide policy-based and indemnificatory housing and subsidies for disadvantaged groups and low-income families.

China has experienced over 40 years of rapid development, during which the real estate industry has made contributions as well as provided lessons.

As China's economic volume continues to increase, the growth rate is bound to slow down, and the high growth rate of urbanization will also slow down accordingly, which makes the demand for houses shrink. Actually, besides the realty industry, the overall social and economic development model is undergoing profound adjustment, transformation and upgrading.

Therefore, the lenient policies can only help to solve part of the problem.

Finding new driving forces and growth points, achieving higher-quality development, and integrating with the new trend of macroeconomic transformation and upgrading may be the new challenges for China's real estate industry in the future.


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