Why is this meeting of the five central departments so important tomorrow?

Tomorrow morning at 10 o'clock, the State Council Information Office will hold a significant press conference, where Minister of Housing and Urban-Rural Development Ni Hong, along with officials from the Ministry of Finance, Ministry of Natural Resources, People's Bank of China, and China Banking and Insurance Regulatory Commission, will attend to introduce the relevant situation of promoting the stable and healthy development of the real estate market and answer questions from reporters.

This time, the five central departments will launch a heavyweight "combination punch" to further boost confidence in the real estate market, further fight the battle to ensure delivery of housing, further promote the "white list," and further implement the target requirements of the Central Political Bureau to stabilize the real estate market.

Assessing the Situation

To understand things, one must look at the situation.

How to evaluate the current performance of the real estate market and do a good job in real estate work? The Central Political Bureau meeting on September 26 provided clear judgments and key requirements: to promote the stabilization of the real estate market, strictly control the increment of commercial housing construction, optimize the stock, improve quality, increase the lending efforts for "white list" projects, support the activation of idle land stock. To respond to public concerns, adjust housing purchase restrictions, lower interest rates on existing housing loans, promptly improve land, fiscal, and financial policies, and promote the establishment of a new model for real estate development.

In the deployment of real estate work, it is particularly emphasized that "efforts should be made to increase the countercyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively carry out grassroots 'three guarantees' work. Issuance and use of ultra-long-term special national bonds and local government special bonds should be done well to better leverage government investment driving effects. Deposit reserve ratios should be lowered, and effective interest rate cuts should be implemented."

Currently, in terms of "responding to public concerns, adjusting housing purchase restrictions, and lowering interest rates on existing housing loans," results have been achieved.

On September 29, Ni Hong, Secretary of the Party Group and Minister of Housing and Urban-Rural Development, presided over a party group meeting to convey and study the spirit of the Central Political Bureau meeting on September 26 and deploy the implementation of the work. The meeting emphasized guiding effective implementation of existing policies in various regions, intensifying efforts to promote the effectiveness of new policies, responding to public concerns, supporting cities, especially first-tier cities, in making good use of the autonomy in real estate market regulation, and adjusting housing purchase restrictions according to local conditions.

On the same evening, Shanghai, Guangzhou, and Shenzhen announced adjustments to housing purchase restrictions, with Guangzhou completely lifting the restrictions. A day later, Beijing also announced adjustments to housing purchase restrictions.

The People's Bank of China also announced overnight reductions in interest rates on existing housing loans and unified the minimum down payment ratio for first and second homes to not less than 15%.

These responses have been proactive, and the effects are evident. According to data from the Shenzhen Real Estate Information Network, during the National Day holiday, the city's new residential properties saw 1,841 units subscribed for sale, an increase of 664% compared to the same period last year. In the week from October 7 to 13, Shenzhen's new homes totaled 329 transactions, a 70.5% increase from the previous week. During the National Day holiday, Beijing's new and second-hand home signings increased by 730% and 58% respectively compared to the same period last year, Shanghai's second-hand homes had an average daily transaction volume of 305 units, nearly three times that of the same period in 2023, and Guangzhou's average subscription volume during the National Day holiday reached twice the level of September's full monthThe strength and weakness of the real estate market are crucial factors influencing economic growth and stability.

From October 10th to 12th, Vice Premier of the State Council He Lifeng conducted research on real estate work in Shanxi and Shaanxi, emphasizing that the real estate market is an indicator of the current macroeconomic situation. It is crucial to do well in real estate work to promote sustained economic recovery, safeguard the vital interests of the people, and enhance political awareness to ensure the smooth delivery of housing and stabilize the housing market.

After a series of policy optimizations and boosts, the real estate market is indeed showing signs of improvement this year. However, progress is not easy.

During the National Day holiday, although key cities' real estate markets showed signs of "improvement," further efforts are needed to overcome challenges such as ensuring the smooth delivery of housing, implementing white lists, and managing land and existing housing inventory. These remain obstacles in the real estate and economic cycles. In a complex and uncertain external environment, an effective market must be driven by proactive government actions to gather strength and momentum.

Positive Outlook

At critical historical junctures, the key is undoubtedly to identify the right direction.

At the Central Economic Work Conference at the end of 2023, the focus for economic work in 2024 was on stability while seeking progress, promoting stability through progress, establishing priorities before breaking through, and introducing policies conducive to stabilizing expectations, growth, and employment. The emphasis is on actively advancing in transformation, structural adjustment, quality enhancement, and efficiency improvement to consolidate the foundation of stable growth.

There have been significant changes in the language used compared to the past two years. In 2021 and 2022, the emphasis was on "stability first, seeking progress within stability," while in 2023, the new concept of "promoting stability through progress" was introduced.

For the real estate market, "promoting stability through progress" means addressing issues as they arise. After years of regulation and control, speculative activities in the real estate market are no longer widespread. With changes in the supply-demand relationship, adjusting, optimizing, and even lifting some restrictive policies from the overheated market period have become necessary. The flexibility and principles of policies must be effectively unified.

To stabilize the market this year, the Ministry of Housing and Urban-Rural Development has been making unremitting efforts. On January 26th, at the beginning of the year, the Ministry convened a meeting to deploy the urban real estate financing coordination mechanism, implementing the spirit of the Central Economic Work Conference. The implementation started with the "white list" related to real estate project financing and smooth housing delivery. The "white list" is an innovative policy that benefits the smooth delivery of housing and stabilizes the public's panic about home purchases. According to the China Banking and Insurance Regulatory Commission, commercial banks have approved over 5700 "white list" projects, with approved financing totaling 14.3 trillion yuan, supporting the on-time delivery of over four million housing units.

Progress has been significant, but it is essential to recognize that the efficiency of the current implementation of the "white list" is still not fast enough compared to the substantial capital needs of enterprises and the number of housing units to be delivered. It is urgent to step up efforts, open up new prospects, and intensify the implementation of the "white list." "Efficiency is life" is a pressing matter for ensuring the smooth delivery of housing and stabilizing the real estate market, and immediate action is neededFor this crucial work, a key point at present is that various departments need to coordinate their work directions and paces. For example, local governments should not forcefully include projects that clearly do not meet the "white list," the housing department should coordinate and review as soon as possible, and the financial department's approval speed and feedback mechanism should be fast.

Another important direction to focus on and problem to solve is the implementation of due diligence and exemption. Financial institutions are still very cautious in this regard, worrying about whether they can truly be exempt from responsibility after lending. The policy implementation in this area urgently needs to be resolved at a high level, placing this matter in the most important position to ensure that the financial sector can go into battle lightly.

Emphasis on Implementation

One part deployment, nine parts implementation.

This phrase is familiar to everyone, but it is definitely not about making "half-cooked rice." Instead, it should be reflected in terms of resounding strength, immediate action, and satisfying results.

In the past two years, due to some misunderstandings and a mentality of relying on waiting, there have been instances of insufficient decisiveness, discounted timeliness, and failure to promptly grasp the "good practices" when implementing decisions in the real estate market stabilization work. Policies may inevitably exhibit some temporariness in terms of timing, degree, and effectiveness.

Now, the central government's positioning on the real estate market is very clear, comprehensive, and precise. The key is not only to understand it thoroughly but also to implement it well, ensuring that the final outcome aligns with the decision-making intentions of the central government.

As we know, the real estate industry, as a pillar industry of the economy, involves dozens of sectors. There are many tasks to be done in the work of stabilizing the market, but they can be summarized as housing, land, finance, and tax work. This time, these important policy and institutional work will be systematically and promptly implemented, all heading towards the direction of "seizing opportunities as soon as identified, doing as much as possible." The real estate sector has once again aggregated powerful new development forces historically, and all parties will face the uncertainty of changing circumstances with the certainty of their work. Currently, the rising trend in the real estate market is the industry's major trend, not simply a technical adjustment. Undoubtedly, with the strong adjustments and improvements in financial, tax, and land policies, the real estate sector will definitely be able to win the battle of delivering houses soon and achieve market stabilization more quickly.

It is worth emphasizing that for the future development of the real estate market, ultimately, it is crucial to firmly grasp the principles of "people-oriented" and "good or bad." Being adept at understanding the overall situation, seizing the initiative in work, fighting proactive battles for development, and resolutely implementing a series of decision-making deployments from the central government and the Ministry of Housing and Urban-Rural Development are essential. For real estate enterprises and housing consumers, this wave of "good news" will bring many benefits, so they can carefully strategize and plan ahead.

Article Source: China Real Estate News, Original Title: "Why is Tomorrow's Meeting of the Central Five Departments So Important?"