Optimization of real estate policy to boost economic recovery

The newest round of optimization in China's real estate policy is expected to inject fresh energy into economic recovery as it aims at stimulating domestic demand and investment while dismantling risks in the real estate and banking industries, according to a senior economist.

Following some stronger-than-expected policy signals from the ministry of housing and urban-rural development, Wang Yuanhong, deputy director of the Department of Economic Forecasting at the State Information Center, made the remarks in an exclusive interview with China Daily. The center is affiliated with the National Development and Reform Commission, the country's top economic regulator.

"As China's leadership has decided to adjust and optimize real estate policy in a timely manner after the 'major changes' in the supply and demand of the real estate market, China is on the track to continue to adjust and optimize related policies aiming at reducing inventory in the real estate industry and propelling its healthy development to benefit overall economic recovery," Wang said, adding that the signals from the ministry of housing and urban-rural development indicate relevant government departments are on the track to implement the decisions made by the Political Bureau of the Communist Party of China Central Committee held on July 24.

"The policy adjustments and optimizations are expected to stabilize the real estate industry, meet rational housing demand of residents without provoking speculation, and inject growth momentum into the demand chains alongside the real estate industry, including that for raw materials, furnishing and household items," he added.

He also stressed the benefits of such changes for the banking industry.

Banks may experience loss in incomes from some housing loans for a short period, but such earnings will eventually increase as banks' lending activities for home buyers will expand with rebounds in the housing market, he said.

Moreover, a stabilized and healthily growing real estate-induced domestic demand and investment expansion will lead to faster growth of the overall economy, bringing about essential benefits to the banking system while helping preventing risks, he added.

Ni Hong, minister of housing and urban-rural development, urged continued efforts to consolidate the recovery trend of the property market at a symposium with property developers recently.

Emphasizing the significance of meeting residents' essential housing demand and their needs for better living conditions, Ni called for fully implementing favorable measures, including lower down payment ratios and mortgage rates for first-time home buyers, and qualifying buyers owning no home as first-time home buyers. He also promised efforts to ensure the delivery of presold homes.

liuzhihua@chinadaily.com.cn