(Yicai) July 22 -- China will accelerate the establishment of a new housing system that will support the recovery of the real estate market, according to the resolution on further deepening reform comprehensively to advance Chinese modernization adopted by the 20th Central Committee of the Communist Party of China at its third plenary session.

"We will move faster to establish a housing system that supports both housing rentals and purchases and foster a new development model for the real estate sector," according to the resolution published yesterday. "We will scale up the building and supply of government-subsidized housing to meet the essential need of salaried people for a home to live in and work to support the diverse needs of urban and rural residents for better housing.

"Municipal governments will be given greater decision-making powers to regulate the real estate market, and based on local conditions, some cities will be permitted to abolish or reduce restrictions on housing purchases and to scrap relevant standards for ordinary and non-ordinary housing," the resolution also noted. "We will carry out reforms to change the way real estate development is financed and to improve the advance purchase system for commodity housing. Improvements will also be made to the taxation system in the real estate sector."

Forty-four of the resolution's items are about the real estate sector and were included in the framework for safeguarding and improving people's livelihood, said Yan Yuejin, research director of the E-House China Research and Development Institute. This means that more future policies will target people's livelihoods and focus on issues that people are most concerned about, such as house purchases and housing prices, he noted.

A housing system supporting both rentals and purchases will bring about a new round of development in the real estate market, said Li Yujia, chief researcher at the Guangdong Housing Policy Research Center under the Guangdong Urban and Rural Planning and Design Institute. This type of system has already achieved preliminary results in popular cities, he added.

Houses for rent account for nearly 30 percent of the total property inventory, Li pointed out. People living in rented apartments can apply for permanent residence, and their children can enjoy public education in the cities they live in.

The resolution's direction of building more government-subsidized houses indicates that the future supply of apartments will be more focused on meeting people's demand to improve their housing situation and form a housing supply system that tracks both the market and security of people.

The fact that the resolution gives municipal governments the autonomy to regulate their real estate market will improve their governance capabilities and grant equal rights in real estate regulation to the central and local governments, Li said.

Mentions about the real estate market in the resolution are long-term and within expectations, according to Huatai Securities. In the short term, China should further promote different policies in different cities based on their situation to stabilize the real estate market. In the medium and long term, attention should be paid to the existing housing sales system and real estate tax after the market is stabilized.

Full text of the resolution of the CPC Central Committee on further deepening reform comprehensively to advance Chinese modernization: https://english.news.cn/20240721/342df6c6e05c4e1a9ce4f6e3b933007b/c.html

Editor: Futura Costaglione