Housing Market Challenges.docVIP

Housing Market Challenges 　　According to figures from the National Bureau of Statistics （NBS）， the number of unsold homes in China has kept growing since 2011， with the total area of unsold homes rising from 272 million square meters at the end of 2011 to 686 million square meters by October 2015. 　　These NBS figures are particularly striking considering that they only take into account unsold homes that have sales permits. Meanwhile， the number of unsold homes without the permits is much larger. 　　Home sales have recovered this year―from January to October， the area of homes that had been sold rose by 7.2 percent year-onyear while the sales value had increased by 14.9 percent. However， unsold home figures are still growing across the country， excluding first-tier cities. With real estate investment surpassing sales volumes， the real estate market is still experiencing excessive supply. 　　The main focus of the real estate industry has been transferred from addressing price bubbles to curbing supply bubbles， because they might affect the sound development of the industry and even endanger the country’s economic security and social stability. 　　Reducing the number of unsold residential areas has now become an important task for the real estate industry and even the national economy. 　　To combat this problem， the government needs to make changes on both the demand front and the supply front―stimulating more demand and curbing supply. 　　Financial， taxation and administrative policies should be used to stimulate demand. Currently the monetary policy is relatively relaxed. The interest rate and required down payments for homes have been lowered， and are likely to be cut even further in the future. 　　As for taxation and fiscal policies， the government could postpone the collection of real estate taxes and reduce deed taxes. The government may also purchase some commercial residential buildings and sell them to lowincome groups as “affordable housing.” When reno