Will China's Real Estate Policy Shift? "Easing Measures Expected"

On the 15th of last month, investors gathered in front of the Evergrande Group headquarters in Shenzhen, Guangdong Province, China, demanding their money back. [Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Amid concerns about the overall health of China's real estate industry due to the bankruptcy crisis rumors surrounding Evergrande Group, the real estate sector is assessing the current situation and discussing countermeasures.

According to the state-run media Global Times on the 13th, the China Real Estate Association, a nationwide organization comprising companies and institutions involved in development, operation, transactions, management, and finance in the real estate sector, will hold an industry forum in Beijing on the 15th.

As some companies including Evergrande face difficulties, the forum is being held to gather opinions from the real estate industry and assess challenges, drawing attention to the industry's stance and responses, as well as the policy authorities' reactions and potential shifts in policy direction.

According to Zhongzi Research Institute, during the peak season of the National Day holiday, the transaction area of newly built pre-sale housing in major Chinese cities decreased by 33% compared to the same period last year, indicating that China's real estate industry is experiencing difficulties in sales, loans, debt, management, and investment.

A source said, "Since the attendees are senior executives from each company, it is expected to serve as a barometer for future developments."

This meeting follows the 'Real Estate Finance Work Forum' held on the 29th of last month by the central bank, the People's Bank of China, and the China Banking and Insurance Regulatory Commission (CBIRC), which summoned executives from 24 commercial banks to emphasize housing market stability.

Yan Weijin, Chief Researcher at the EJI Research Institute Think Tank Center, said, "The fact that another meeting is held following the People's Bank forum clearly shows that the real estate regulatory authorities are paying close attention to the risks faced by the market and companies."

He added, "Understanding the industry's actual situation through this meeting is of great significance for a potential shift in the Chinese government's real estate policy direction. There is a possibility that various forms of policy easing measures will be introduced from the end of this month."

He also stated, "From the market perspective, the focus will shift from 'preventing overheating' to 'preventing excessive cooling'; from the corporate perspective, from 'strengthening restrictions' to 'enhancing support'; and from the financial perspective, from 'preventing bubbles' to 'preventing debt risks.'"

This content was produced with the assistance of AI translation services.