Housing rules should adapt to market changes
Editor's note: The Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development point out that China will promote high-quality development in the real estate sector by cultivating a new development model, introducing new policies and making industry improvements. China Daily spoke to Chen Jie, director of the Center for Housing and Urban-Rural Development at Shanghai Jiao Tong University, about the development of the real estate industry. Below are excerpts from the interview. The views don't necessarily represent those of China Daily.
The real estate industry is a foundational part of the national economy and is deeply embedded in the ecosystem. Its development model and operational logic cannot undergo a sudden or disruptive overhaul. The guiding principle is to restore housing to its essential role as a public good and a consumer product that serves the broader goal of building livable, modern accommodation for the people. The focus in the real estate industry has moved from quantity-oriented expansion and risk control to a model emphasizing quality, efficiency and institutional improvement.
That the recommendations call for the introduction of a full life-cycle safety management system for housing reflects the recognition of the safety risks in China's vast housing stock. Buildings constructed in different eras have varying design standards, aging structures and maintenance challenges. New housing alone cannot address these problems. A full life-cycle safety management approach ensures systemic oversight across design, construction, inspection, use, maintenance, renovation and demolition. Strengthening safety management at every stage can reduce quality-related incidents, standardize maintenance funding, clarify accountability and boost public confidence in existing housing assets. It also supports the goal of building safe, comfortable, eco-friendly and smart houses, ensuring long-term usability and asset security.
Some cities have unreasonable restrictions on housing purchases, such as rigid qualifications for non-local residents, lengthy social insurance requirements or strict household registration rules. High taxes and complex procedures in the secondhand housing market further hinder the efficient flow of housing resources. In addition, high financing costs for mortgages and insufficient institutional support for the rental market, including cumbersome contract registration and weak tenant rights protection, continue to constrain demand.
To address these issues, major cities will have to gradually ease restrictions. This aligns with the central government's adoption of city-specific policies and its call for the removal of unreasonable barriers, allowing local authorities to proceed in phases according to their unique market and capacity conditions.
A coordinated policy package is required to achieve the goal of meeting the housing needs of all people and ensuring the livability of properties. On the supply side, mid-priced housing options should be expanded, land and financing tools should be diversified and government-subsidized rental housing should be promoted.
The livability of housing should be enhanced by phasing out presale housing, advancing existing-home sales and accelerating the construction of good quality houses and neighborhoods. Upgrading property management and encouraging "property plus lifestyle" services should be given targeted policy support. Urban renewal and stock improvement should be accelerated through dedicated renovation funds, tax incentives and subsidies.
On the demand side, the mortgage rules should be refined, and innovative financial products should be developed for both first-time and upgrading buyers. Unreasonable administrative restrictions, such as residency, school-district or cross-district purchase barriers, should be removed, with better integration of public services across departments.
For institutional governance, a full life-cycle safety management system should mandate quality inspections, maintenance funds, information transparency and accountability mechanisms. Property and community service standards should be elevated through stronger regulation, standardized maintenance funds and the greater participation of residents. Land and tax policies should guide developers to increase mid-range and rental housing supply through differentiated land pricing and tax incentives. Finally, the data relating to residency, social insurance, education and housing should be integrated to enable a unified qualification verification and "one-stop" service mechanism.
