According to People News, five Chinese government departments, including the Ministry of Housing and Urban-Rural Development, held a joint press conference on Thursday (October 17) to discuss efforts to "promote the stable and healthy development of the real estate market." The government emphasized a "combination of policies" aimed at stabilizing the housing market. However, analysts suggest that the proposals are merely a repackaging of existing policies, offering little innovation and unlikely to address the severe oversupply problem in China’s real estate sector.

According to Voice of America, at the press conference, the Minister of Housing and Urban-Rural Development, Ni Hong, alongside officials from the Ministry of Finance, the Ministry of Natural Resources, the People's Bank of China, and the National Financial Regulatory Administration, stated that their mission is to guide local governments to act quickly and "launch a series of measures to stabilize the market and halt the downward trend."

Housing Minister Expresses Confidence in October Market Data

Ni Hong outlined the so-called "combination of measures," which can be summarized as "four cancellations, four reductions, and two increases."

The "four cancellations" refer to granting local governments more autonomy in policy regulation, allowing city-specific measures, and eliminating restrictions on property purchases, sales, pricing, and the distinction between ordinary and non-ordinary residential properties.

The "four reductions" involve lowering mortgage rates for housing fund loans, reducing down payment ratios for housing loans, decreasing interest rates on existing loans, and cutting taxes and fees for those selling old homes to buy new ones, all to reduce the cost of homeownership and ease mortgage pressures on residents.

The "two increases" include the addition of 1 million urban village and dilapidated housing renovation projects, and raising the credit limit for real estate "whitelist projects" to 4 trillion yuan (approximately $562 billion) by the end of the year. This is intended to ensure that all eligible projects receive the necessary loans to meet reasonable financing needs.

Officials Claim Chinese Housing Market Has 'Bottomed Out'

At a press conference, Ni Hong, Minister of Housing and Urban-Rural Development, provided an analysis, stating that in 35 major cities across China, there is a need for 1.7 million units of housing to renovate urban villages and dilapidated buildings. Beyond that, there are 297 other cities across the country, indicating even more housing demand.

Meanwhile, Xiao Yuanqi, Deputy Director of the National Financial Regulatory Administration, stated that as of Wednesday, approved loans for real estate projects on the "whitelist" had reached 2.23 trillion yuan, and he predicted that this figure would double to 4 trillion yuan by the end of the year.

Towards the end of the press conference, Ni Hong mentioned that, based on data from the National Bureau of Statistics, the real estate market in first-tier cities had stabilized across the board since the beginning of October. He expressed confidence that, under the influence of various real estate policies, the market had started to "bottom out" after three years of adjustment, and he was optimistic that "the October data will show a positive and optimistic result."

"Combination of Policies" Falls Short of Expectations, Stock Market Reaction Disappoints

However, officials’ confidence did not seem to resonate with many stock market investors and online commentators.

In the comment section of a live broadcast of the press conference on Weibo by Headline News, many users were sarcastic and critical. One user from Shandong, "The Stories of Heaven and Earth," accused the policies of forcing ordinary people to repay debts for "bloodsucking capitalists," angrily stating: "They will embezzle a huge sum again! This government is at its end!"

Another user from Guangdong, "So-called Strong Nation, Truly Suffering People," asked, "Can China's economy not survive without speculating on real estate?" This was echoed by another comment from Chongqing: "Don't speak the harsh truth." A user from Jiangxi, "A Dust Brushing China," criticized the new policies as "reckless" and warned they would "intensify social inequality."

The stock market reflected the skepticism. At 10 a.m., during the press conference, the Shanghai Composite Index initially rose but then declined, with real estate stocks dropping further in the afternoon, falling below the 3200-point mark. Hong Kong media outlet ET Net bluntly reported that "the much-anticipated joint release of real estate policies by five departments appears to have knocked down the investment market."

In Hong Kong, the Central News Agency of Taiwan reported that the Hang Seng Index closed down by 207 points, or 1.02%, at 20,079 points. Analysts in the report suggested that the decline in Hong Kong stocks may reflect market disappointment with Beijing’s newly announced measures.

Experts Criticize the "Combination of Policies" as Ineffective

Wang Guocheng, a research fellow at the First Research Institute of the Chung-Hua Institution for Economic Research in Taipei, believes that the Chinese government's "combination of policies" suffers from being overly complicated yet largely comprised of policies already in place, failing to address key issues.

Wang noted that the biggest problem in China's real estate sector is the abundance of unfinished and surplus housing projects, which are tied to failing property developers and broken capital chains. However, the projects on the government’s "whitelist" are financially stable and capable of providing sufficient collateral, meaning the policy offers no help in resolving the unfinished and dangerous building problem.

Additionally, Wang highlighted that while the Ministry of Finance mentioned allowing local governments to use special bonds to deal with unsold housing stock, many local governments are already financially strapped, making it unlikely they can issue more bonds to solve the problem.

Regarding the "four cancellations" announced by officials, Wang pointed out that similar measures had already been introduced, such as at a People's Bank of China press conference in late September, yet the housing market did not improve. He also argued that adding 1 million new urban village and dilapidated housing renovation projects is another misguided approach.

Wang told Voice of America: "In fact, there is already an oversupply of vacant housing in mainland China. Now they are going to build even more urban village and dilapidated housing projects, which will only increase supply further. Why not use that same money to acquire unfinished buildings and immediately convert them into public housing?"

Xu Zhen: No Solution in Sight from Debt-Driven Housing Price Support

Xu Zhen, Vice Chairman of the Future City Institute at the Chinese University of Hong Kong, similarly believes that China’s real estate problem cannot be resolved in the short or medium term due to the ongoing capital chain crisis. Currently, both central and local governments, as well as developers, are heavily in debt, making it unrealistic to adopt large-scale debt-driven measures to increase liquidity.

Xu noted that, from a macro perspective, the root cause of China’s real estate crisis lies in the "tax-sharing system" adopted years ago, which allowed the central government to absorb too many private resources. As a result, local governments were forced to rely on "land finance"—selling land for quick cash—essentially mortgaging future land and tax resources.

He added that apart from Beijing, Shanghai, Guangzhou, and Shenzhen, where housing prices have remained relatively stable or slightly declined, major cities like Hangzhou and Nanjing have such large housing inventories that it will take at least two to three years to clear. Neither the central nor local governments have the financial strength to solve such a massive problem.

Xu believes a rational approach would be to allow housing prices to gradually soften, maintaining a low level of market activity. On the contrary, if the government continues to take on debt in an attempt to "create an inflection point" and "boost housing prices," the consequences could be more severe.

Xu told Voice of America: "They [the Chinese government] are now using debt to address previous debts. This is a fundamentally flawed approach. Compared to the real estate bubble burst in Japan in the 1990s, I think this situation is even more dangerous and severe. Right now, there is no visible way out."