China’s new real estate model to be built on ‘3 major projects’, with cheaper property for urban migrants and young adults

China's government has announced a new strategy for the real estate industry, focusing on creating a more affordable housing market. This strategy is centered around three key initiatives: constructing budget-friendly homes, renovating densely populated urban areas, and building necessary public emergency facilities. nnNi Hong, China's Minister of Housing, expressed that the nation's property market is undergoing a challenging transformation. He emphasized the need for a shift from the old approach, which prioritized rapid construction and high volume, to a new model that aligns with the standards of high-quality development. Ni's comments were published in the People's Daily, a newspaper that communicates the Communist Party's perspectives. nnExperts in the field suggest that the government should remove restrictions on real estate transactions to stimulate the market. They also propose that the government should consider financial support for property developers facing a cash shortage. Ni highlighted the focus on providing affordable housing options for urban newcomers and the younger generation, as well as improving living conditions in urban villages, which are often cramped and surrounded by high-rise buildings. nnTao Ran, a professor at the Chinese University of Hong Kong (Shenzhen), pointed out that while increasing housing availability in cities with growing populations is a positive move, it's not a complete solution for the real estate sector's issues. He noted that local governments might be hesitant to support affordable housing initiatives due to the potential reduction in land sale profits. Tao also mentioned the widespread lack of confidence in the property market, advocating for the removal of all purchasing, pricing, and lending restrictions to encourage home buying. nnLarry Hu, a leading economist, remarked that although the central financial work conference promised to address developers' financing needs, the reality is that banks are cautious about lending to them due to the associated credit risks. Hu suggested that the central government should intervene more decisively, but he anticipates that significant measures will only be taken if the situation deteriorates substantially. He concluded that the property sector's recovery is contingent on resolving the credit risk dilemma.