(AsianFin)—In the second session of the 14th National People's Congress on Tuesday, Chinese Premier Li Qiang delivered the government work report, acknowledging efforts in the previous year to implement varied city-specific policies, optimizing real estate regulation, reducing mortgage costs, and avoiding systematic debt and financial risks.

Looking forward, the focus is on optimizing real estate policies, supporting the financing needs of private, publicly traded and state-owned firms, and ensuring the stable and healthy development of the real estate market.

Setting the Tone for 2024 Real Estate: Dual Emphasis on Stability and New Development Model

The 2024 approach emphasizes "coordinating development and security, averting and mitigating risks in key areas." This marks a shift from the 2023 focus on major economic and financial risks, signaling a dual strategy for stabilizing and establishing a new real estate development model.

The commitment is to promote high-quality development for enhanced security. The report includes comprehensive measures to address risks in real estate, local government debt, and small and medium-sized financial institutions, maintaining overall economic and financial stability.

Mitigating hidden risks involves optimizing real estate policies, supporting financing needs, and ensuring steady market development. Long-term risk prevention includes adapting to new urbanization trends, accelerating affordable housing construction, and meeting diverse housing demands.

Enabling Migrant Workers to Reside in City and Renewing Urban Spaces

The report emphasizes "improving the 'people, land, and money' linkage policy," facilitating the emigration of migrant workers from rural areas to live permanently in cities. Regions with large and growing populations will be easier to receive land and additional financial resources, leading to further concentration of real estate market shares in key urban clusters.

Steadily implementing urban renewal action plans, such as the revival of urban villages, is a priority. The "three major initiatives" are crucial, with a focus on public infrastructure for both everyday and emergency purposes and renewed urban spaces. The re-lending of credit for supporting small and medium-sized banks injects funds, aiding the urban renewal initiative.

Preventing and Mitigating Risks: Transforming Real Estate Policies

The focus on risk prevention involves a shift from "three red lines" to "three arrows" and the introduction of a "real estate financing coordination mechanism." This transformation aims to prevent fire sale of real estate companies, ensuring a controlled pace of exits and safeguarding individual projects.

Urban real estate financing coordination mechanisms are highlighted as a crucial measure to prevent real estate market risks. This approach reflects a sophisticated strategy for managing real estate financing, contributing to the restoration of market confidence.

Adapting to Market Dynamics: Continuous Optimization of Policies

The prolonged real estate market downturn from 2022 to 2023 led to the implementation of various policies. In 2024, a trend of continuous optimization and relaxation of real estate policies is expected. This includes further relaxation in first-tier cities, comprehensive opening in second- and third-tier cities, and improvements in the real estate pre-sale fund supervision system.

Accelerating Affordable Housing Construction: Dual-Track System

The report emphasizes accelerating the construction of a new real estate development model, particularly the dual-track system of "affordable housing + market-based housing." This system aims to provide affordable housing to the working class while allowing market-based housing to return to its commodity attributes.

In 2024, the initiation of affordable housing construction is expected to mark an upward trend. Major cities plan to construct and sell significant amounts of tradable affordable housing, signaling a return to a dual-track system.

Improving Fundamental Systems: Meeting Diverse Housing Demands

The government work report introduces terms like "improving fundamental systems related to commercial housing" and "meeting residents' inelastic housing needs and diverse improvement-oriented housing demands." Reforms in land management systems, commercial housing pre-sale systems, and housing financial and taxation systems are expected.

Meeting housing demand involves diversification, considering various improvement-oriented housing needs. Cities are expected to optimize policies based on local situations, adjusting restrictions on purchases, down payment percentages, and mortgage rates.