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The Performance of Real Estate Market in the First Half of 2020: Problems and Policy Options (No.204, 2020)
2020-09-27
By Wang Ruimin & Niu Sanyuan, Research Institute of Market Economy, DRC
Research Report, No.204, 2020 (Total 5948) 2020-8-17
Abstract: The COVID-19 epidemic exerted a strong impact on the real estate market in the first quarter of 2020, but with the effective control of the epidemic in China and the gradual restoration of economic and social order, the real estate market witnessed a quick recovery in the second quarter, and the sharp decline in commercial housing sales was initially contained. In the first half of the year, investment in real estate development realized a V-shaped reversal. However, it should be noted that the impact of the epidemic has aggravated the contradiction between supply and demand, and the housing financial environment has become more relaxed, resulting in significant increase in the price of second-hand housing in some cities. Meanwhile, job opportunities and income expectations have both dropped due to the epidemic, and household demand for housing has become weakened and even contracted. Under such circumstances, we need to stick to the stance that houses are for living in and not for speculation. We need to implement relevant policies in light of different conditions in different cities and cities need to shoulder the principal responsibilities. The current difficulties should not lead us to go astray and take real estate industry as a short-term means to boom economic growth. We need to focus on lowering taxes and maintaining financial stability, maintain the overall continuity and stability of regulation policies, release reasonable demand for living improvement, and gradually establish a long-term regulation and management mechanism by way of economic and legal measures.
Keywords: performance of real estate market, lowering taxes, maintaining financial stability
