(Yicai) Dec. 24 -- China expects to see a trend where new home sales decline while those of pre-owned houses increase over the next five years as cities enter a stage of housing inventory adjustment.

"The increasing proportion of second-hand home sales is a trend that needs to be fully recognized in the coming period," the Ministry of Housing and Urban-Rural Development said at the National Housing and Urban-Rural Development Work Conference held in Beijing from Dec. 22 to yesterday. "The new home and second-hand home markets should be viewed as a whole."

China has sold around 5 billion square meters of new homes over the past five years, issued CNY6.5 trillion (USD925.4 billion) in personal housing provident fund loans, and supported depositors to withdraw CNY9.4 trillion from the housing provident fund, according to data released at the conference.

The Chinese real estate market has entered a period where the overall home supply is sufficient, but demand is not being fully released, the ministry noted. As a result, housing inventory is gradually increasing, which further constrains the investment willingness of developers and the stabilization of prices, it added.

The floor area of sold homes and the investment completion were only at 48 percent and 62 percent in the first 11 months of this year, respectively, from the level in the same period in 2021, according to a report by KPMG China Research Institute released on Dec. 22.

The Chinese real estate market is still facing oversupply, but there have been signs of marginal improvement in inventory pressure in recent months.

China's floor area of unsold homes dropped by 45.85 million sqm last month from February, decreasing for nine straight months, the latest data from the National Bureau of Statistics showed. The new construction area has also declined, which helps reduce inventory and improve the supply-demand relationship.

In addition, second-hand house listings in some major cities declined last month both from a year earlier and from October, according to the NBS data.

In the next steps for revitalizing housing inventory, efforts should be combined with urban renewal and the transformation of urban villages to make better use of existing land, the ministry pointed out. The aim is to promote the acquisition of existing homes for use as affordable housing, resettlement homes, dormitories, and talent houses.

In addition, a housing quality improvement project will be implemented to orderly advance the construction of "good homes," the ministry pointed out.

Editor: Martin Kadiev