China's Real Estate Market: Signs of Stabilization Amid Policy Support

The real estate market in China has been a subject of close scrutiny in recent years, with concerns over a potential slowdown and the impact of policy changes. However, the National Bureau of Statistics (NBS) has maintained an optimistic outlook on the future trend of the real estate market, citing recent data and policy initiatives.

The NBS has reported a narrowing decline in real estate investment and transactions, indicating a stabilization trend. In 2022, the decrease in floor area transaction in new residential projects improved by 1.9 percentage points from the first half of the year, marking four consecutive months of positive momentum. Additionally, the sales revenue from new homes has shown a reduced decline for five straight months.



The introduction and implementation of a comprehensive set of real estate policies have been instrumental in boosting industry professionals' optimism. A survey conducted by the NBS among real estate developers and agencies in 70 major cities revealed a significant uptick in optimism among industry professionals. In September, sentiment among new home industry professionals improved by 10 percentage points compared to the previous month, while the outlook for second-hand homes rose by 6.5 percentage points.



Recent policy adjustments, such as loan and mortgage reforms, have also played a crucial role in market stabilization. In 2022, domestic loans to real estate development enterprises decreased by 25.4%, but sentiment among industry professionals has improved significantly. This suggests that targeted policy measures are boosting market confidence and facilitating transactions.

The policy impact has been most pronounced in regional markets with high leverage and overreliance on speculative investment. The Pearl River Delta and Yangtze River Delta have witnessed significant slowdowns in real estate investment growth and substantial declines in new home sales. However, these regions are also experiencing a chill in demand, indicating a potential turnaround.

While the real estate market in China faces challenges, the NBS's optimism is supported by recent data and policy initiatives. The narrowing decline in investment and transactions, improved industry sentiment, and targeted policy measures indicate a stabilizing market. As the real estate sector continues to evolve, investors should monitor these trends and adapt their strategies accordingly.

Word count: 598