(Yicai) Dec. 12 -- China has set stabilizing the real estate market as one of its key tasks for next year, with significant efforts to be made on cutting existing housing inventory.

Policies should be tailored to local conditions to control the increase of new homes, reduce inventory, and optimize supply, according to the two-day Central Economic Work Conference, which sets China's economic agenda for the year ahead and which concluded in Beijing yesterday.

China encouraged buying existing housing for use as affordable homes and other purposes. In addition, it suggested deepening the reform of the housing provident fund system, orderly promoting the building of "quality homes," and accelerating the establishment of a new real estate development model.

The guidance of "optimize the existing houses" from last year's conference shifted to "cut inventory" this year, Feng Bo, vice president of Chengdu Urban Construction and Development Research Institute, told Yicai. This indicates that the destocking pressure remains considerable against the backdrop of relatively weak demand in the real estate market, Feng added.

China will make further efforts to promote inventory reduction in the real estate market to achieve a supply and demand balance next year, Feng noted.

The key for the real estate market policy next year is "cut inventory," said Yan Yuejin, vice president of Shanghai-based E-House China Research and Development Institute.

The destocking cycle in 100 Chinese cities nationwide reached a record high of 27.4 months in November, according to E-House's inventory report.

Affordable homes supply will mainly come from existing housing, mostly new properties, but it cannot be ruled out that it will expand to second-hand houses in the future, Yan pointed out.

High-quality urban renewal is an important strategic direction for China's urbanization development, with its core lying in transforming the urban development mode from scale expansion to connotation improvement, which is a systematic project, Wang Yeqiang, deputy director and researcher at the Chinese Academy of Social Sciences' National Future City Laboratory, said to Yicai regarding the conference proposing that "urban renewal should be advanced with high quality."

Regarding the reform of the provident fund system, Li Yujia, chief researcher at Guangdong Housing Policy Research Center, said that as a major inclusive financial tool in the real estate market, the individual loan ratio of the fund, or the ratio of the balance of personal housing provident fund loans to the balance of housing provident fund contributions, is still relatively low in some cities.

Therefore, it is necessary to accelerate the allocation or adjust the surplus and shortage, optimize the business environment for inter-regional loans, and support the expansion of new models that combine renting and buying houses, according to Li.

Editor: Martin Kadiev