China’s new real estate model to be built on ‘3 major projects’, with cheaper property for urban migrants and young adults

Authorities intend to renovate urban villages and create more emergency facilities as ‘high-quality development’ is prioritised

Reworked model comes as major property developers continue to face a liquidity crisis, and some analysts say bailouts by Beijing could help avert a banking catastrophe

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Morning commuters pass a construction site in Beijing. Major cities across China could see big changes to their urban-village areas under the nation’s new real estate development model. Photo: Bloomberg

Published: 9:00pm, 13 Nov 2023

With Beijing vowing to build a new real estate development model on the bedrock of “three major projects” – including more affordable housing – some analysts are calling for all real estate restrictions to be lifted for buyers and sellers.

And they say central leadership might consider bailing out certain property developers in the midst of a liquidity crisis.

China’s housing minister, Ni Hong, said on Sunday that while the country’s real estate market is in a period of transformation that is fraught with difficulties, the foundation exists for sustainable development.

“The old development model that pursued speed and quantity no longer suits the new requirements of high-quality development, and a new development model is urgently needed,” he said in an interview with party mouthpiece People’s Daily.

“Building a new model of real estate development is a fundamental strategy to solve current problems and promote the stable and healthy development of the real estate market,” Ni added.

And the new model will be implemented through what Ni called “three major projects” – building affordable housing, renovating urban villages and constructing emergency public facilities.

Proposed during the twice-a-decade central financial work conference last month, the reworked model is based on the concept of “houses are for living in, not for speculation”, Ni said.