(Yicai Global) July 25 -- The Political Bureau of the Central Committee of the Communist Party of China, the country’s top leadership body, has signaled further support for the real estate sector.

In a meeting yesterday, the Politburo pointed out for the first time that it is necessary to adapt to the new situation of major changes in the relationship between supply and demand in the property market, adjust and optimize policies in a timely manner, and make good use of the policy toolbox based on the actual situation in different cities.

Faced with a sustained chill in the real estate market, the Politburo has sent a clear signal, Wang Yeqiang, director of the real estate committee of the China Society of Urban Economy, told Yicai Global.

The meeting had a more positive basic tone toward the real estate market than in April, said Chen Wenjing, market research director at China Index Academy. The property market is under intense pressure to change, Chen said, with more support for first-time buyers and better housing conditions remaining the direction of policy.

The market recovered less slowly than expected in the first six months, with investment falling 7.9 percent to CNY5.86 trillion (USD819.8 billion) from a year earlier, while investment in residential property fell 7.3 percent to CNY4.44 trillion. Some 59,515 square meters of commercial housing were sold, a 5.3 percent drop from a year ago, with residential sales down 2.8 percent.

The central and local governments will further increase their support for demand-side policies, Wang noted, adding that policies in third- and fourth-tier cities have been quite relaxed but remain relatively restrictive in first-tier and popular cities. Only when confidence recovers in these markets can it then rebound in the third- and fourth-tier cities, he pointed out. 

Another policy direction raised by the Politburo was to continue to bolster policy support for the markets of first-tier and popular cities in terms of attracting private investment in affordable rental housing and public facilities, urban village renovation, and other real estate areas.

The property sector’s disappointing first half was also related to falling incomes and job prospects. The People's Bank of China polled 20,000 urban depositors in 50 Chinese cities, with respondents expressing a lack of confidence in both, while the share of those anticipating gain in property prices also fell.

In this regard, the Politburo proposed stepping up efforts to safeguard people's livelihoods, raise stable employment to a strategic level, and make comprehensive considerations to ensure basic livelihoods, wages, and expenditures and expand the middle-income group.

Editors: Shi Yi, Martin Kadiev