“Since the beginning of this year, as various policies to stabilize the real estate market being fulfilled in faster pace, the market has continued to move towards stabilization and recovery,” said the spokesperson for the National Bureau of Statistics, an official in charge of the Department of Comprehensive Statistics of the National Economic and Social Development at a press conference held by the State Council Information Office recently. He stated that from the perspective of data in May, the real estate market was operating generally stably. The year-on-year decline in housing prices in 70 major cities continued to narrow, and the inventory of commercial housing continued to decrease.

Under the influence of various policies to stabilize the real estate market, sales of commercial housings remained basically stable. From January to May, the sales area and sales value of new commercial housing decreased by 2.9% and 3.8% respectively year-on-year, which was basically the same as that from January to April. The market transactions in some first-tier and second-tier cities were relatively active, and the sales area and sales value of commercial housing kept on growing. The inventory of commercial housing decreased, the unsold area of commercial housing were reduced by 7.15 million square meters at the end of May compared to the end of April, a decrease for three consecutive months.

According to the 58 Anjuke Leading Index, the diffusion index of housing search heat in May increased by 0.14 points compared to the previous month, while the diffusion index of on shelf time decreased from 0.5 to 0.38.

However, in terms of price, although the year-on-year decline in prices of newly-built commercial residential properties continues to narrow, there is a trend of expanding sales price decline on a month on month basis. According to data from the Shanghai-based Yiju Real Estate Research Institute, the month-on-month decline in the national 70-city new commercial housing price index expanded from 0.1% to 0.2% in May. Additionally, the decline in the national 70-city second-hand housing price index also expanded, and the market was still in the stage of “selling at lower prices to push sales”.

Yan Yuejin, vice president of Shanghai-based Yiju Real Estate Research Institute, said that the current decline is still manageable compared with last year, especially the first three quarters of last year, which leaves room for further improvement in the year-on-year decline indicator. However, the previous stable trend of the real estate market has come across some new resistance. It is necessary for local authorities to continue to explore potential demand and promote the improvement of transaction data.

Zhang Bo, Director of 58 Anjuke Research Institute, said that although housing prices have fluctuated in short term in May, the overall trend of the real estate market stabilizing has not changed. The policy signal of “Taking greater efforts to stabilize the real estate market”, sent out by the State Council executive meeting on June, demonstrated the government’s determination to stabilize the property market.

Zhang Bo predicted that government at all levels will introduce a combination of policies from multiple dimensions such as regulating supply and demand, strengthening financial support, and optimizing market structure to continuously advance the stabilization and improvement of the real estate market in the future. Specifically, from the perspective of supply and demand, the entry barrier for home purchases would be further lowered and demands to improve living situation would be thrived. In terms of finance, there is a possibility of increasing financial support for real estate developers and home buyers. Market structure optimization may focus on areas such as “good housing” construction and urban renewal to comprehensively assist the real estate market in achieving stable and healthy development.

Chen Wenjing, Director of Policy Research at China Index Academy, said that from the policies of “continuously consolidating the stable situation of the real estate market” emphasized in the Central Political Bureau meeting on April 25th to “taking greater efforts to stabilize the real estate market” highlighted in the State Council executive meeting on June 13th, it can be seen that the upgraded policy statements reflect vividly and accurately the central government’s acute judgment on market changes. She believes that the "greater efforts" will prompt regulatory authorities and local governments to accelerate policy responses and achieve market expectation and supply-demand balance through precise measures and multiple approaches.

A relevant official from the National Bureau of Statistics said that in the next stage, it is necessary to earnestly implement the decisions and arrangements of the Central Committee of the Communist Party of China and the State Council, government at all levels should actively adapt to the significant changes in the supply and demand of the real estate market, continuously promote urban renewal and the renovation of dilapidated houses, increase the supply of “good housing”, expedite both first-time and improvement housing demands, so as to actively build a new model for real estate development and boost the stable and healthy development of the real estate market.