Evolving housing needs unlock fresh prospects for China's property revival

BEIJING -- As China's property market transitions to a new development stage, a fresh vision for homes centered on comfort, sustainability and cutting-edge design emerges, driven by consumer expectations and policy initiatives.

In a recent press conference, Ni Hong, minister of housing and urban-rural development, highlighted good housing, a concept that has gained traction and points to the future growth driver of the country's property sector.

Elaborating on the vision of good housing, Ni said that while its standards might evolve along with social and economic development, good housing essentially features homes that are green, low carbon, intelligent and safe.

According to the latest data, the per-capita housing construction area in China's urban areas exceeded 40 square meters by the end of last year, while the urban built-up area reached 64,000 square kilometers in the country.

Analysts interpret these figures as evidence of progress made in expanding urban living space, paving the way for a more refined focus on quality over sheer quantity in housing development.

The transition is also mirrored in a new blueprint emerging in China's property landscape -- the fourth-generation housing. Unlike the concrete jungles of the past, these residences integrate garden spaces into high-rises.

These homes not only reduce common area ratios but also enhance living spaces with better views and a diversified environment, said Xu Yuejin, an analyst with the China Index Academy, noting that some cities have already adjusted regulations to support this trend.

Developers need to focus on innovating new housing products that leverage these regulatory adjustments to meet the market demand for better homes, Xu added.

With new expectations from homebuyers, real estate is increasingly viewed as a service-oriented industry, contributing to the economy through improving existing properties and services rather than solely building new infrastructure, said a report by CITIC Securities.

Building good housing entails not only high-quality construction, but also better property management, premium home furnishing, and low-risk property transactions, the report further explained.

According to official data, by the end of 2022, roughly 20 percent of urban homes were over 30 years old. It is estimated that by around 2040, nearly 80 percent of existing homes will be classified as "old," facing higher risks of issues such as roof leaks and aging facilities.

In its latest move to address the challenge, China is piloting a housing pension system in 22 cities including Shanghai, which aims to better facilitate existing housing upgrade and enhance people's housing quality and living environment.

Complementing these efforts, the government has allocated approximately 150 billion yuan ($21.1 billion) in ultra-long special treasury bonds in July to support large-scale equipment renewals, including updating old elevators.

To ensure a higher quality of life for residents, Ni noted that the approach should go beyond building new homes to developing good communities and urban districts.

In line with this objective, the country plans to renovate 54,000 old urban communities this year, with 33,000 projects already underway in the first six months.

With these policies in place, the country's real estate development model is expected to evolve, favoring companies with better services, noted the report, projecting that home renovation sector could see accelerated growth, potentially leading the entire industrial chain.