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China property
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China to outline support for commercial and industrial property and first-time homebuyers, eye stability at ‘two sessions’: policy advisers

  • Policy housing as well as commercial and industrial properties will be in focus during the meetings
  • Policy signals will determine what role property market plays in helping the broader economy rebound

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A construction site in Ningbo, in China’s eastern Zhejiang province. The property sector contributed 7 per cent of China’s GDP last year. Photo: Bloomberg
Iris Ouyang
Beijing is expected to issue policies that will support the country’s property sector at two major national-level meetings starting on Thursday, as it tries to increase domestic consumption to cushion China’s biggest economic decline since 1976, two policy advisers said.
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Policy housing, or subsidised homes for low-income groups and residents affected by urban renewal plans, as well as commercial and industrial properties will be in focus, according to Gu Yunchang, the deputy director of the Property Policy Expert Committee of China’s Ministry of Housing and Urban-Rural Development, and Li Yujia, chief researcher at Guangdong Property Policy Research Institute, a policy advisory branch of the provincial housing regulator.

The Chinese People’s Political Consultative Conference will take place on May 21, while delegates to the National People’s Congress gather a day later. Both meetings, known as the two sessions, take on greater significance this year, with investors tuning in for some forward-looking guidance on key sectors of the country’s coronavirus-ravaged economy. The pandemic, at home and aboard, continues to weigh on China’s economy, and policy signals from the two meetings will determine what role the 16 trillion yuan (US$2.3 trillion) property market will play in helping the broader economy rebound.

China’s property sector has recovered fastest among all industries. For instance, home purchases pushed up the prices of new homes in 70 major cities by 0.4 per cent in April. In fact, property sales recovered almost to 2019 levels for the month, aided by a surge in debt financing.

But domestic consumption could face problems if unemployment were to increase. Retail sales, for instance, fell 7.5 per cent across the country, higher than forecasts, alongside a historic 6.8 per cent contraction in China’s national output during the first quarter.

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“The property market absolutely helps drive demand,” said Gu. “We need to improve sales to ensure stable investment, and also to stabilise housing prices, especially in large cities.”

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