The Central Economic Work Conference set the overarching tone for the property market next year as "steady and healthy development," emphasizing the principle that "homes are for living in, not for speculation," and outlined plans for building a long-term, robust framework for the real estate market.

　　Sending a clear signal: Housing is returning to its primary purpose—residential use.

　　Housing is one of the fundamental needs for human survival, and its primary purpose lies in providing shelter. Getting back to basics is precisely what healthy development of the real estate market entails.

　　In 2016, housing prices in some popular first- and second-tier cities surged rapidly at one point, with experts pointing to investment speculation as one of the key forces behind this surge. When homes increasingly became commodities for investment and speculation—tools used to chase exorbitant profits—their original purpose as places to live began to drift away.

　　"The housing is for living in, not for speculation," stated the Central Economic Work Conference.

　　"This means that decision-makers have further clarified the positioning of China's real estate market, emphasizing that the primary goal of real estate development is to ensure 'housing for all,' thereby restoring housing to its fundamental purpose as a place to live," said Ni Pengfei, Director of the Center for Urban and Competitiveness Studies at the Chinese Academy of Social Sciences. "Previously, we viewed the real estate industry as a key driver of economic growth and a major consumer trend. Now, however, we’re repositioning it as a vital public welfare sector that supports overall economic and social development—this shift will help deflate speculative bubbles and foster a healthier, more stable market environment."

　　Li Tiegang, a professor at Shandong University's School of Economics, said the central government has sent a clear signal to clarify perceptions about real estate value. He added that local governments should address economic development challenges by shifting toward economic transformation rather than relying on land-based fiscal revenue, while property developers need to curb speculative activities in the market and focus on innovation and strategic pivots to boost their profitability.

　　Li Tiegang said that excessive investment in the real estate sector has siphoned off capital meant for the real economy. The central government has emphasized reducing investment in real estate, advocating for housing to serve its primary purpose of providing shelter—thereby freeing up more resources to revitalize the real economy and other vital sectors, which will ultimately contribute to the long-term, healthy growth of the economy.

　　Establish a long-term mechanism: Strengthen the top-level design of housing policies

　　The Central Economic Work Conference emphasized the need to comprehensively employ financial, land, fiscal, tax, investment, and legislative measures to accelerate the development of foundational systems and long-term mechanisms that align with China's national conditions and market dynamics.

　　Establishing a long-term mechanism is the key to addressing the "internal heat" in the real estate market. Liu Hongyu, Director of the Real Estate Research Institute at Tsinghua University, notes that policy adjustments that "dance" along with market fluctuations will only exacerbate short-term volatility and trigger panic among investors. In contrast, clear and well-designed institutional frameworks can foster stable market expectations, curb the "herd effect" of blind following, and ultimately prevent extreme market swings—both upward and downward.

　　Ni Pengfei said that the recent Central Economic Work Conference made strategic adjustments, aligning real estate development with macroeconomic goals and urbanization efforts. This approach will help reverse the economy's excessive reliance on the housing sector and address the severe polarization within the real estate market.

　　Professor Zhao Xiuchi from the University of International Business and Economics says that the key to establishing a long-term mechanism—and also its biggest challenge—lies in building and improving fundamental systems. This includes determining what kind of housing system should be put in place, how housing supply can better meet diverse levels of housing demand, and which tools should be employed to effectively regulate the real estate market and achieve a balance between supply and demand.

　　Ni Pengfei said that fostering the stable and healthy development of China's real estate sector hinges on establishing a long-term market regulation mechanism and government control system that ensures an even distribution of real estate profits. Moving forward, it will be essential to advance the drafting and implementation of a housing law—based on redefining the core principles and positioning of housing development in China—and to institutionalize policies aimed at making housing affordable for the general public.

　　Employing a Comprehensive "Toolbox": Alleviating Market Supply-Demand Imbalances

　　The supply-demand relationship is the fundamental factor driving fluctuations in the real estate market. At the Central Economic Work Conference, officials emphasized a "comprehensive approach"—addressing both the symptoms and root causes. On one hand, they are planning long-term mechanisms to tackle the underlying issues; on the other, they’re deploying an integrated "toolbox" to ease the imbalance between supply and demand in the market.

　　Addressing the current polarization in the real estate market, Li Tiegang said that in 2017, stricter policies are expected to continue in first-tier cities, focusing on curbing speculation and preventing overheating. Meanwhile, second- and third-tier cities will see ongoing efforts to clear excess inventory.

　　The Central Economic Work Conference clearly stated that macroeconomic monetary policy should be carefully managed, while micro-level credit policies should support rational home purchases for owner-occupancy, while strictly limiting credit flows to investment and speculative housing activities.

　　Hu Jinghui, Vice President of Weiye Wo Ai Jia Group, said that effective financial policies can eliminate speculative behavior in the housing market. Implementing strict down-payment loan regulations can help prevent excessive liquidity from being released, thereby safeguarding housing's primary purpose of providing a place to live.

　　From the perspective of land supply, the Central Economic Work Conference clearly stated that the policy linking population to land allocation must be implemented, with construction land indicators distributed based on population mobility patterns. Local governments must take primary responsibility: cities facing significant upward pressure on housing prices should appropriately increase land supply, raise the proportion of residential land, and revitalize idle and inefficient urban land resources.

　　Ni Pengfei said the meeting proposed promoting the integration of migrant workers into urban life and unlocking farmers' demand for home purchases, which could help ease excessive adjustments in the housing market and foster urbanization. By strategically reorganizing industries, populations, and public resources across the country, as well as adjusting urbanization strategies, it’s possible to drive the coordinated development of the real estate market.

　　The long-term direction of housing policy is already clear: as long as we implement targeted measures effectively and ensure full accountability, China will ultimately achieve the goal of "housing for all."