Written by/Leju Finance Wu Wenting

On July 18th, the historic Third Plenary Session of the 20th CPC Central Committee released a communique, with the word "reform" appearing more than 50 times. Content related to real estate and the development of new urbanization rarely appeared.

The plenary session proposed that the integrated development of urban and rural areas is an inevitable requirement of Chinese-style modernization. It is necessary to coordinate new industrialization, new urbanization, and comprehensive rural revitalization, comprehensively improve the integration level of urban and rural planning, construction, and governance, promote equal exchange and two-way flow of urban and rural elements, narrow the urban-rural gap, and promote the common prosperity and development of urban and rural areas. It is necessary to improve the institutional mechanisms for promoting new urbanization, consolidate and improve the basic rural management system, improve the support system for strengthening, benefiting, and enriching agriculture, and deepen land system reforms.

The plenary session also pointed out that it is necessary to coordinate development and security, implement various measures to prevent and defuse risks in key areas such as real estate, local government debt, and small and medium-sized financial institutions, strictly implement work safety responsibilities, improve natural disaster monitoring and prevention and control measures, especially for floods, and weave a dense network of social security risk prevention and control to effectively maintain social stability. It is necessary to strengthen public opinion guidance and effectively prevent and defuse ideological risks. It is necessary to effectively respond to external risks and challenges, lead global governance, and take the initiative to shape a favorable external environment.

In fact, the expression of "preventing and defusing real estate risks" has been mentioned many times in recent years, but its inclusion in the Third Plenary Session document underscores its importance.

Zhang Bo, President of the 58 Anjuke Research Institute, pointed out that in the future, the institutional mechanisms for new urbanization will be orderly combined with the new model of real estate, especially the linkage mechanism of "people, houses, land, and money." By determining housing based on people, land based on housing, and funding based on housing, combined with the changes in population and industrial trends brought about by the in-depth development of new urbanization, a long-term effect of balanced supply and demand and rational structure in the real estate market can be achieved.

Some analysts also believe that the two-way flow of urban and rural elements and the prevention and defusing of real estate risks are key work points related to the real estate sector, and it is expected that continuous efforts will be made in these areas.

On July 19th, Han Wenshou, the Deputy Director in charge of daily work of the Central Finance and Economics Office and the Director of the Central Rural Work Office, said that recently, positive changes are emerging in the real estate market. We must adhere to the combination of digesting inventory and optimizing increment, further implement and improve new real estate policies, effectively ensure the delivery of housing, and revitalize the inventory of commercial housing and land resources.

According to data from the National Bureau of Statistics, from January to June this year, although various indicators of real estate investment, sales, and financing continued to decline, the declines have narrowed.

In terms of investment, from January to June, national real estate development investment amounted to 5.2529 trillion yuan, a year-on-year decrease of 10.1%, which was the same as the decline from January to May. For June alone, real estate development investment decreased by 10.1% year-on-year, with the decline narrowing by 0.9 percentage points compared to May, which represents a positive change.

In terms of sales, from January to June, the sales area of newly-built commercial housing was 479.16 million square meters, a year-on-year decrease of 19%, with the decline narrowing by 1.3 percentage points compared to January to May; the sales of newly-built commercial housing amounted to 4.7133 trillion yuan, a year-on-year decrease of 25%, with the decline narrowing by 2.9 percentage points.

This Third Plenary Session also proposed that "ensuring and improving people's livelihoods through development is a major task of Chinese-style modernization," "improving people's quality of life," and "continuously satisfying people's aspirations for a better life." For housing, in addition to ensuring delivery, it is also necessary to ensure quality and safety, and the construction of "good houses" will be indispensable in the future.

The E-house China Research and Development Institute analyzed that on the one hand, improving the quality of life largely involves improving the quality of housing. China's real estate sector is currently entering a new stage of development, especially with a strong push for the construction of good houses. Good houses are closely related to housing quality, and promoting the construction of good houses will help continuously, quickly, and deeply improve housing quality and quality of life. "Living in a new home" and "living in a big house" are the contents that subsequent policies and work should focus on.

On the other hand, the promotion of this goal should be combined with recent real estate optimization and adjustment efforts. Ordinary people have strong demands for new homes and home exchanges, but it is difficult to sell second-hand homes. Therefore, subsequent efforts to revitalize the second-hand housing market are important levers for reducing market interference and truly promoting the recovery of purchasing power. The stronger the revitalization efforts and effects of second-hand homes, the higher the speed and quality of improving housing and living quality will be.