Housing woes in key cities to get top priority

Solving the housing problem in major cities and developing the home rental market will be among the eight key objectives for the central authorities next year and will set the tone for the overall development of the real estate sector in the country, experts said on Monday.

The thrust on housing, which was set at the Central Economic Work Conference, is the most elaborate guideline for the property sector since 2016, they said.

"Living matters to the well-being of the people. (We) must uphold the principle that 'housing is for living in, not speculation', and implement policies in accordance with each city's condition, as the property market is heading for the direction of stabilized and healthy development," said the conference.

The meeting also highlighted the need to solve the key housing problems in major cities, and pledged to place strong emphasis on the development of public rental housing programs, refine policies for long-term tenancy housing and standardize development of the rental market.

"It is noteworthy that the meeting has made special mention of the living problems in big cities. The central authorities have realized that housing problems can only be solved with stable home prices, sufficient supply and adequate leasing options," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

According to Yan, new housing projects are being actively pursued in major cities like Shenzhen, Guangdong province, and Shanghai this year. But many people are finding it difficult to buy their ideal homes in large cities, showing the necessity of government efforts to meet the housing requirements.

Chen Sheng, president of the China Real Estate Data Academy, said an important part of next year's property focus is the emphasis on healthy and stable development, which requires a healthy balance between supply and demand along with strong policies to control the sector.

"There would appear a demand of more than 9 billion square meters in terms of living space during the 14th Five-Year Plan period (2021-25), but only 70 percent, or about 6.8 billion sq m, can be solved through transactions, leaving the gap to be digested via leasing," said Chen.

Supply and demand in third-and fourth-tier cities have basically remained steady, with each family having about 1.5 units of apartments on average. But in large cities, especially those holding a large number of migrant workers and university students, housing problems are yet to be resolved. Both such groups cannot afford to buy a home, and hence leasing is a more preferable option for them.

The larger a city is, the more precious are its land and other resources. Therefore, local governments must actively use policies to control the sector and resolve the housing problems of residents. At the same time, they should also help people who cannot afford to buy homes with leasing services, said Hui Jianqiang, head of research with Beijing Zhongfang-Yanxie Technology Service Ltd.

The meeting also said that the government should strive to ensure that tenants enjoy the same level of public services as homeowners.

"The stress on equal rights for tenants and homeowners will help more people, who are not yet capable of buying homes, not to rush in and purchase property, eliminate the existence of discrimination toward leasing, and accelerate the creation of a mature leasing market," said Xu Xiaole, chief market analyst with the Beike Real Estate Research Institute.

Rental housing trials for new residents, younger generations and low-income families have been launched in 13 cities since the end of 2019, basically to popularize leasing, said Xu.

Though there will be checks on speculation in home purchases, more land supply will go to construction programs either for purchase or for rental housing, so as to ensure the steady and healthy development of the property market, said Yan from E-house.