By Leju Finance, Wang Min

Another significant news about the real estate sector has emerged.

Today (July 21st), the Xinhua News Agency was authorized to release the "Decision of the CPC Central Committee on Further Deepening Comprehensive Reform and Promoting Chinese-style Modernization".

The "Decision" points out that we should accelerate the establishment of a housing system that combines rental and purchase, and speed up the construction of a new model for real estate development. We should increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. Support the diverse housing improvement needs of urban and rural residents. Fully empower city governments with autonomy in real estate market regulation, implement policies tailored to each city's specific conditions, and allow relevant cities to cancel or adjust the restrictions on housing purchases, as well as the standards for ordinary and non-ordinary residential properties. Reform the financing methods for real estate development and the pre-sale system for commercial housing. Improve the real estate tax system.

Previously, on July 18th, the historic Third Plenary Session of the 20th CPC Central Committee issued a communique, in which the word "reform" appeared more than 50 times, with rare mentions related to real estate and the development of new-type urbanization.

The Plenary Session proposed that the integrated urban-rural development is an inevitable requirement for Chinese-style modernization. It is necessary to coordinate the overall revitalization of new-type industrialization, new-type urbanization, and rural areas, comprehensively improve the level of urban and rural planning, construction, and governance integration, promote equal exchange and two-way flow of urban and rural elements, narrow the urban-rural gap, and promote the common prosperity and development of urban and rural areas. We should improve the institutional mechanisms for promoting new-type urbanization, consolidate and improve the basic rural management system, improve the support system for strengthening, benefiting, and enriching agriculture, and deepen land system reforms.

The Plenary Session also pointed out that we should coordinate development and security, implement measures to prevent and resolve risks in key areas such as real estate, local government debt, and small and medium-sized financial institutions, strictly implement safety production responsibilities, improve monitoring and prevention measures for natural disasters, especially floods, and weave a dense social security risk prevention and control network to effectively maintain social stability. We should strengthen public opinion guidance and effectively prevent and resolve ideological risks. We should effectively respond to external risks and challenges, lead global governance, and actively shape a favorable external environment.

On the second day after the release of the communique, the CPC Central Committee held a press conference to introduce and interpret the spirit of the Third Plenary Session of the 20th CPC Central Committee. Han Wenshou, the Deputy Director in charge of daily work at the Central Finance Office and Director of the Central Rural Work Office, said, "China's real estate market is large in scale and involves a wide range of areas, exerting a systematic influence on macroeconomic operations. Currently, significant changes have taken place in the supply-demand relationship of the real estate market, which is in the process of adjustment."

"We must adhere to the principle of seeking progress while ensuring stability, first establish and then break, solve problems in the process of advancement through reform, accelerate the transformation of old and new development drivers, provide diverse and robust power support for high-quality development, and persist in digesting inventories and optimizing increments, further implementing and improving new real estate policies, effectively ensuring the delivery of housing, and revitalizing the inventory of commercial housing and land resources," Han Wenshou said.

Han Wenshou also mentioned that we should accelerate the construction of a new model for real estate development, eliminate the drawbacks of the past "high debt, high turnover, high leverage" model, build "good houses" that meet the new expectations of the people, better satisfy rigid and improved housing needs, and establish corresponding financing, fiscal and taxation, land sales, and other basic systems. It should be noted that China's new-type urbanization is still advancing, and there is considerable room for high-quality development in the real estate sector.

Han Wenshou said that there is still considerable room for high-quality development in the real estate sector, but for it to develop, the real estate sector must return to a healthy state, so it inevitably requires policy support.

Data from the National Bureau of Statistics show that from January to June this year, despite the decline in various indicators such as real estate investment, sales, and financing, the declines have narrowed.

From January to June 2024, nationwide real estate development investment amounted to 5.2529 trillion yuan, a year-on-year decrease of 10.1%, which was the same as that from January to May. In June alone, real estate development investment decreased by 10.1% year-on-year, with the decline narrowing by 0.9 percentage points from May, marking a positive change.

On the sales side, from January to June, the sales area of newly-built commercial housing was 479.16 million square meters, a year-on-year decrease of 19%, with the decline narrowing by 1.3 percentage points from January to May; the sales value of newly-built commercial housing was 4.7133 trillion yuan, a year-on-year decrease of 25%, with the decline narrowing by 2.9 percentage points.