By Deng Yusong, Shao Ting, Niu Sanyuan & Wang Ruimin, Institute of Market Economy, DRC

Research Report, No. 105, 2020 (Total 5849) 2020-5-12

Abstract: Under the impact of COVID-19 epidemic, the main indicators of China’s real estate market fell rapidly in the first quarter of 2020, and the market has cooled down significantly. Under the city-specific guideline, policies and measures to stabilize the real estate market in various regions have been intensified, and the real estate policies have been adjusted to different degrees. However, the direction of regulation has been unswervingly stuck to by the central government, and relevant government departments have suspended the policies in some cities. With the global spread of COVID-19 epidemic, the demand shock on China’s real estate market will increase in the next stage. However, the loose financial environment formed in the process of coping with the economic downturn may also plant the seeds of a systemic bubble in the real estate market, which we need to pay close attention to. In the face of new changes in the real estate market, acting on the principle that “houses are for living in, not for speculation” and taking into account both the need for stability and risk prevention, it is suggested that the main task should be reducing taxes and fees and maintaining financial stability, so that the impact of epidemic on the real estate market can be minimized and stabilized smoothly.

Keywords: real estate market, downturn, stabilize the market