21st Century Business Herald:

How do you assess the performance of the real estate market from January to February, and what positive changes have been observed? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, thanks to effective policies, the real estate market has maintained general stability. Overall transactions and new home sales have been stable, while second-hand home transactions have been relatively brisk. Housing prices in first-tier cities have begun to recover. Market expectations are generally stable, and the real estate market has continued to stabilize since the fourth quarter of last year.

First, market transactions have generally remained stable. As real estate market policies were optimized and adjusted, and residents' demand for essential and upgraded housing was gradually releasing, property transactions began to improve from the fourth quarter of last year. In January and February of this year, overall market transactions remained stable. During this two-month period, the year-on-year decline in the area and amount of new commercial housing sales narrowed by 7.8 and 14.5 percentage points, respectively, compared with the full-year figures of last year, while in 40 key monitored cities, the area and amount of new commercial housing sales rose 1.3% and 7.1% year on year, respectively.

Second, housing prices continued to stabilize. In February, stabilizing policies to cease market decline took effect, and as the result, among 70 large- and medium-sized cities, the sales prices of new commercial residential buildings in first-tier cities continued to rise month on month. Meanwhile, the year-on-year decline in sales prices for both new and second-hand residential buildings in first-, second- and third-tier cities continued to narrow. Regarding the sales prices of new commercial residential buildings, the year-on-year decline in first-tier cities narrowed by 0.4 percentage point compared with the previous month. The year-on-year decline in second- and third-tier cities narrowed by 0.3 and 0.1 percentage points, respectively, compared with the previous month. Regarding the sales prices of second-hand residential buildings, the year-on-year decline in first-tier cities narrowed by 0.7 percentage point compared with the previous month, while the year-on-year decline in second- and third-tier cities both narrowed by 0.2 percentage point.

Third, market expectations remained stable. A survey of real estate business entities shows that in February, among developers and intermediary institutions in 70 large- and medium-sized cities, 71.8% of surveyed employees expected new commercial residential building sales prices to remain stable or rise over the next six months, up 2.8 percentage points from the previous month. This suggests a generally stable outlook among market institutions.

Fourth, real estate development companies have seen operational improvements. As real estate sales in first- and second-tier cities showed a positive trend of halting declines and stabilizing, the sales stability contributed to improvements in enterprise operational development and helped generating liquidity. In the first two months, the year-on-year decline in real estate development investment narrowed by 0.8 percentage point compared with the whole year of 2024. In particular, residential investment saw its decline narrow by 1.3 percentage points, while the decline in funds available to real estate enterprises narrowed by 13.4 percentage points than full-year 2024.

Overall, the real estate market has remained generally stable this year and continues to show signs of halting its decline and stabilizing. However, we should also realize that the real estate market in some regions is still undergoing adjustments, and there are still pressures on stabilizing the market. In the next stage, we must thoroughly implement the decisions and arrangements made by the CPC Central Committee and the State Council. We should adopt city-specific policies, adjust and reduce restrictions, and intensify efforts to renovate urban villages and dilapidated housing, thereby fully unleashing the potential demand for basic and improved housing. We must also improve the housing system by diversifying suppliers and channels of support and by attaching equal importance to home purchases and rentals. Furthermore, efforts should be made to accelerate the establishment of a new model for real estate development and to promote the stable and healthy development of the real estate market. Thank you.