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China commits to accelerating urban renewal and stabilizing the housing market by 2026

According to a report released Tuesday on the housing policy conference, China will intensify its efforts in 2026 to stabilize its property market and urban renewal at the beginning of its new Five-Year Plan.

According to a readout by the official housing ministry outlet, the?conference?held on December 22-23 in Beijing mapped out the key housing development tasks during the Five-Year Plan and called the next year as a crucial starting point for implementation.

The "vigorous implementation" of urban renewal will be a major focus, along with?efforts for stabilisation of the real estate market and to prevent and defuse risk and improve supply of affordable housing.

China's once-key engine of growth has been on a steady decline since mid-2021 despite repeated government promises to boost the sector. Weak sales of homes and falling prices have affected consumer confidence, and the homeowners. Around 70% of household wealth is tied to real estate.

The developers have also been impacted by a?lack of liquidity. China Vanke (000002.SZ), said in a filing on Monday that it had received approval to extend the grace for a 2 bn yuan bond repayment due on Dec 15.

Officials said that policies on market stabilisation would be tailored according to local conditions in order to manage supply and reduce inventory. Renovation of urban villages is one measure, as well as supporting local governments to purchase existing homes for use in affordable housing.

Officials said China will also push for a shift to selling new homes that are already finished so "buyers know what they're getting".

The conference agreed to enhance the "project-whitelist" program, which is a government-backed initiative that allows local officials to nominate residential projects in limbo for bank financing. It also urged city governments not to limit their discretion when it comes to adjusting and optimizing property policies.

Officials said that they would adhere to the market-oriented approach and the rule of law in order to control risk, including developers' debt, tightening oversight of pre-sale funds, and protecting homebuyers' rights.

Officials said that they would provide housing assistance for low-income urban families facing difficulty, and adopt targeted measures to meet basic housing needs, such as young people. Reporting by Liangping Gao and Yukun Zhang; editing by Shri Navaratnam, Michael Perry and Michael Perry.

(source: Reuters)