The executive meeting of China's State Council held on June 7 deployed work related to real estate. The meeting stated that it will "continue to study and reserve new policy measures for destocking and stabilizing the market," and also mentioned that "for the digestion and revitalization of existing housing and land, we must emancipate our minds and broaden our thinking, while also proceeding steadily and solidly."

　　Analysts believe that this meeting mentioned matters related to real estate destocking multiple times and explicitly stated "emancipate our minds and broaden our thinking," conveying three major signals.

　　First, the urgency of destocking in the housing market is strong.

　　According to the hundred-city inventory report released by the E-House Research Institute, in April, the inventory of newly built commercial residential housing in China's hundred cities exceeded 500 million square meters. At the current sales pace, it would take 26.5 months to digest the new home inventory. The institution estimates that the reasonable destocking cycle for China's hundred cities is about 13 months.

　　It should be noted that the inventory problem is brought about by new changes in the supply-demand relationship in the real estate market and should be regarded as a phased issue that will not persist over the long term. However, it should not be taken lightly; resolving it requires simultaneous policy adjustments on both the supply and demand sides—accelerating sales on one hand and revitalizing existing inventory on the other.

　　Second, previously introduced policy measures will be implemented at a faster pace.

　　The previously introduced heavyweight "5.17" real estate policy package has two main parts: first, lowering mortgage rates and down payment ratios to activate market demand; second, having the government purchase some existing commercial housing for use as affordable housing and other purposes to revitalize existing inventory. Among these, the new mortgage policy has already been implemented quickly; according to institutional statistics, more than 80% of cities have already implemented the new policy. However, the second part, namely "purchasing existing commercial housing for reserve," has not yet been promoted on a large scale, and this work is expected to accelerate going forward.

　　Cao Jingjing, general manager of the Index Research Department of the China Index Academy, said that in recent years some cities have already adopted the practice of having state-owned capital platforms directly purchase developers' existing new home inventory and convert it into rental housing. It is expected that more supporting policies will follow in the future, and the intensity of financial support is also expected to increase further. On the land side, for revitalizing existing land inventory through repurchase, acquisition, and other methods, supporting funds and other measures may be further refined and implemented; in terms of new land supply, the policy of "reducing land supply in cities with relatively large inventory" will be strictly implemented.

Third, more innovative policies are expected to be accelerated in reserve and introduced in due course.

　　Industry insiders believe that a major feature of this round of real estate policy lies in the introduction of innovative policy measures, such as the establishment of a "whitelist" for real estate projects, which has identified the crux of the problem.

　　Cao Jingjing pointed out that judging from the relevant wording of the meeting, new measures to destock and stabilize the housing market are still in the process of research and reservation and will still take some time to be implemented, but from the overall tone it can be seen that a new round of housing market destocking initiatives may gradually be launched.

　　Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, believes that the new destocking policy is intended to accelerate the digestion of inventory in both the second-hand and new home markets, promote a virtuous cycle, and stabilize price expectations. Specifically, in the future, the state may raise acquisition funds from the top down and increase efforts to acquire commercial housing for resettlement through urban village renovation and demolition and redevelopment.

　　Since the beginning of this year, Chinese authorities have deployed work related to stabilizing the housing market multiple times, and localities have accelerated the introduction of supportive policies. In May, multiple core cities in China optimized their housing market policies, and the effects have begun to appear. Taking Shanghai as an example, according to China Index data, from May 28 to June 5, the average daily transaction volume of second-hand commercial housing in Shanghai was 847 units, an increase of about 43% compared with the daily average in April.

　　Cao Jingjing said that in the short term, if policies in core cities continue to be optimized, the market is expected to continue to improve and gradually drive the national market toward bottoming out and stabilizing by spreading the recovery from key points to broader areas.