&#34;Don't be late, act early, and ensure the implementation of policies.&#34; This is an important directive issued by the Central Political Bureau meeting and the Central Economic Work Conference in the past week, clearly conveying a strong signal that macro policies will continue to be intensified and stabilize the real estate and stock markets by 2025.
In the recently concluded months of October and November, driven by a series of policy initiatives, the genuine demand in the real estate sector has continued to be released, with commodity housing sales data showing a significant year-on-year increase and turning positive for the month. The transaction heat in the real estate market in December has basically maintained the status of the previous two months. The key moving forward is the operational trend of the real estate market in the first quarter of next year. According to the data on the basic situation of the national real estate market from January to November released by the National Bureau of Statistics on December 16, multiple indicators such as sales and financing continue to improve. However, looking at the year-on-year decline of 10.4% in national real estate development investment, it will take time for the recovery on the sales side to fully transmit to the investment side, and further boosting of corporate confidence is needed. Currently, real estate development activities remain at a low level as companies are busy with destocking.
In light of these new circumstances, the upcoming work to stabilize and consolidate the rebound of the real estate market has significant potential for both existing and incremental policies, especially financial policies and financial instruments that need timely innovation and adjustment in response to the situation. Local governments and enterprises have expressed a desire for finance to play a leading role in stabilizing the real estate market, to regularly carry out multi-level and diversified financing matching activities, break the routine pace, and introduce more exclusive financial service plans that treat different types of real estate enterprises equally to meet their reasonable financing needs. In supporting private real estate companies in bond financing and facilitating reasonable equity financing through the capital market, it is also necessary to effectively alleviate the issues of &#34;difficult and expensive financing&#34; for enterprises. The financial sector should guide banking institutions to formulate and implement specific implementation rules for due diligence exemption based on actual conditions, refine positive and negative lists and execution standards, and for real estate companies facing temporary risks but whose projects meet loan standards, the branches and personnel conducting business may be exempted according to the due diligence exemption system. Relevant factors should be reasonably excluded from performance assessments, effectively conveying the due diligence exemption system to grassroots institutions and personnel, allowing them to act without worries and take decisive actions to ensure policy implementation.
Economics and facts have proven that finance is the lifeblood of the economy, and funds are the &#34;blood&#34; of enterprise operations; without &#34;blood,&#34; enterprises cannot move forward.
On one hand, financial institutions need to grasp the timing and rhythm of new policy releases on the consumer end, such as further lowering the reserve requirement ratio and interest rates, and respond to public calls for a moderate reduction in housing mortgage loan and provident fund loan rates. We know that the first quarter is often a low season for the real estate market, but in recent years, a &#34;small spring&#34; phenomenon has emerged, which is influenced by companies actively offering promotions and innovative designs for new homes, but more importantly, it is stimulated by the favorable policies released. Therefore, housing consumption policies need to be firmly targeted and strengthened.
On the other hand, it is necessary to innovate tools and increase the intensity of stock commodity housing acquisition. Although the People's Bank of China previously provided 300 billion yuan in relending for local governments to acquire stock commodity housing, given the limited strength and effectiveness, it is essential to innovate new policy tools. Our local research has found that local governments and state-owned enterprises are constrained by funding and accounting issues, while also worrying that the rental return rate of acquired commodity housing for affordable housing may not cover the relending costs, leading to hesitation and inaction. In light of this situation, extraordinary policies may be adopted
Through the strong support of large-scale funds from the central bank and relevant departments for the acquisition of existing commercial housing, these funds need to have long terms and low interest rates. We found that the People's Bank of China's previous re-lending rate for affordable housing was set at 1.75%, but commercial banks adjusted their loan rates to local state-owned enterprises based on their own interest considerations. This also determines that local platform companies need to consider the minimum return rate when storing affordable housing. In contrast, the rental return rate in the rental market is currently around 2% in most cities. Considering the subsequent operational costs, renovation costs, and a series of capital inputs, whether the returns can cover the costs is a significant question mark. It is essential to emphasize and utilize the correct reform methods, allowing local governments and platform companies to lighten their burdens and take action in the significant matter of using commercial housing for affordable housing, promoting &#34;business to support housing,&#34; thereby achieving a &#34;self-resolving dilemma.&#34; This is feasible and should be done.
On the other hand, it is crucial to ensure the timely implementation of credit fund approvals for the real estate &#34;white list&#34; after they are approved. The &#34;white list&#34; for real estate financing, vigorously promoted by the Ministry of Housing and Urban-Rural Development, has achieved good results after nearly a year of implementation, and we are now entering the decisive phase. On October 17, Minister of Housing and Urban-Rural Development Ni Hong announced at a press conference held by the State Council Information Office that by the end of the year, the credit scale for &#34;white list&#34; projects will be increased to 4 trillion yuan, and all qualified real estate projects will be included in the &#34;white list.&#34; This immediately conveyed significant positive news to the market, instilling strong confidence. As of the end of November, the approved loan amount for national &#34;white list&#34; projects has reached 3.6 trillion yuan. However, we must also recognize that this work has a broad horizontal and vertical scope, and the most critical current task is to ensure that all approved loans are fully utilized and that fund disbursement is genuinely expedited. Once a decision is made, it must be executed quickly and effectively. The &#34;white list&#34; not only relates to alleviating corporate difficulties and further reducing the risks of housing delivery but also stabilizes prices and reactivates the market, promoting a virtuous cycle in the real estate chain. If the implementation of actions lags behind decision-making, policies will be ineffective and counterproductive. Currently, some real estate companies are facing liquidity issues, making project delivery difficult and leading to continuous layoffs. The entire upstream and downstream real estate enterprises are also severely affected by overdue payments, with some well-known construction companies having to declare bankruptcy due to unpaid project funds, which is regrettable.
We believe that local governments should also take proactive actions in alleviating corporate difficulties. For example, provincial governments have the responsibility to help leading private enterprises in their provinces reduce their debt burdens and may consider equity participation if necessary. Extraordinary times require extraordinary measures. Alleviating corporate difficulties is also beneficial for localities and will provide more favorable conditions for stabilizing the real estate market next year. Conversely, avoiding responsibility and failing to assist in times of crisis not only contradicts the spirit of a proactive government but also affects the healthy operation of the local economy.
Stability in real estate leads to stability in the economy; this is a common understanding of development. The stabilization of the real estate market is actually a prerequisite for economic stabilization. If the real estate market stabilizes overall next year, achieving around 5% economic growth will be a relatively easy target, which is crucial for implementing the &#34;two-step&#34; strategy. Moreover, a reasonable economic growth rate is the premise and foundation for achieving high-quality development and improving people's livelihoods. Therefore, the significance of stabilizing the real estate market is self-evident and should not be neglected
In 2025, both the supply and demand sides of the real estate market need to make efforts to continuously promote the overall market to quickly stabilize and stop declining. Financial and fiscal policies should also be more proactive, providing extraordinary support for corporate financing and ensuring housing delivery. It is foreseeable that the demand side will do everything possible to stimulate consumption, the supply side will liberate thoughts to improve resource allocation, and the funding side will reform and innovate to invigorate financial &#34;living water.&#34; Consumers will have smooth access to buying and renting houses, and enterprises will develop without worries. Stabilizing the real estate market will naturally follow, leading to a rebound and positive development in the real estate market, forming a win-win development pattern.
This article is sourced from China Real Estate News, original title: &#34;Finance Should Deeply Play the Role of 'Living Water' in Stabilizing the Real Estate Market&#34;

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The article points out that in the upcoming efforts to stabilize and consolidate the real estate market's recovery from decline, both stock policies and incremental policies still have significant potential for improvement, especially in financial policies and financial instruments that need timely innovation and adjustment in response to the current situation. On one hand, financial institutions need to grasp the timing and rhythm of new policy releases on the consumer side, such as further lowering the reserve requirement ratio and interest rates. On the other hand, they should innovate tools to enhance the collection of existing commercial housing. Additionally, it is essential to ensure the timely implementation of credit fund approvals for the real estate "white list."

- The recent Central Political Bureau and Economic Work Conference emphasized the need for timely policy implementation to stabilize the real estate and stock markets, signaling continued macroeconomic support through 2025.  
- Despite improvements in real estate sales and financing, a 10.4% year-on-year decline in development investment indicates that recovery requires time and enhanced corporate confidence.  
- Effective financial policies and innovative tools are essential to support real estate stability, with a focus on timely loan approvals and addressing liquidity issues faced by developers to ensure market recovery.

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The media supervised by the Ministry of Housing and Urban-Rural Development: Finance should deeply play the role of "living water" to stabilize the real estate market