The new round of real estate policy optimization and adjustment efforts are continuously increasing. On May 27th, the Shanghai Housing and Urban Rural Development Management Commission and four other departments jointly issued a notice on optimizing policies and measures for the stable and healthy development of the real estate market in this city (hereinafter referred to as the "notice"), proposing nine policy measures, including adjusting and optimizing housing purchase restriction policies, optimizing housing credit policies, and supporting the "trade in" policy. In fact, since mid May, a unified deployment has been made at the national level, and local policies have been implemented according to the city. Multiple real estate support policies have been intensively introduced. Standing in the current observation of changes in the supply and demand relationship in the real estate market, whether it is a dual approach of "supply" and "demand", or a dual emphasis on "digesting stock" and "optimizing increment", this round of real estate policy combination punch shows many profound implications. The recent package of policies has highlighted the characteristics of increasing both supply and demand in the real estate market, from relaxing purchase restrictions and guiding residents to lower mortgage interest rates, to establishing a coordination mechanism for urban real estate financing, and ensuring the delivery of houses. From the demand side, on May 17th, the central bank issued three consecutive moves around housing credit, including reducing the minimum down payment ratio of personal housing loans, lowering the interest rate of personal housing provident fund loans, and canceling the lower limit of commercial personal housing loan interest rates for first and second homes at the national level. In the following 10 days, several cities in Guangdong, Shanghai, Xi'an, and Chongqing announced the cancellation of the lower limit of local first and second home loan interest rates, and lowered the minimum down payment ratio. In addition, since May, after Zhuhai "completely lifted the purchase and sale restrictions on commercial housing" on the 24th, only 6 places in the country are still subject to purchase restrictions. The policy effect is gradually becoming apparent, and in some first tier cities and provincial capital cities, the enthusiasm of homebuyers has increased, and actual market transactions have also increased. "My parents hope to purchase a 140 square meter improved housing in the southern new city, and I have transferred several projects in the past few days. I plan to make a decision soon," said Ms. Li, a Nanjing resident who is currently looking at the house. Manager Song, the consultant for the project, introduced that after the new policy, the number of visits to the project increased by 300%. Since May, the project has subscribed to over 80 units. Meng Xiangyuan, Vice President of the Nanjing Real Estate Society, believes that the market has experienced a significant adjustment and has reached a bottom. However, many people were still unwilling to take action before because they did not see any signs of a turning point. "The series of new policies demonstrate the determination of the central and local governments to 'stabilize the real estate market' and release this positive signal," he said. From the supply side perspective, the urban real estate financing coordination mechanism established in late January this year has been widely implemented in multiple cities across the country. Data shows that 297 prefecture level and above cities across the country have established financing coordination mechanisms. As of May 16, commercial banks have approved a loan amount of 935 billion yuan for "whitelisted" projects according to their internal approval process. Industry experts point out that a package of new policies will not only implement policies from the demand side, lower the threshold for homebuyers to purchase houses, alleviate their loan repayment pressure, accelerate the entry of more effective demand into the market, but also establish a coordination mechanism for urban real estate financing from the supply side, actively provide financial support for compliant real estate projects that meet the "whitelist" requirements, etc., which will be conducive to a more balanced real estate supply and demand relationship. Both "digesting stock" and "optimizing increment" are equally important in adapting to the new changes in the supply and demand relationship of the real estate market. In this round of policy measures, "digesting stock property" and "optimizing increment housing" are equally important. Especially, promoting the exchange of old for new housing and establishing re loans for affordable housing have become important measures to revitalize existing housing, and have also become new highlights. According to incomplete monitoring data from the China Index Research Institute, as of May 27th, over 70 cities across the country have expressed support for housing "trade in old for new" and "collect old for new". "Among them, developers or state-owned asset platforms purchase old houses and use the proceeds to purchase designated new housing projects, which has been the mainstream way of 'exchanging old for new' housing since the beginning of this year," said Cao Jingjing, General Manager of the Index Research Department of China Index Research Institute. Industry insiders believe that the biggest advantage of this approach is its precision, which not only revitalizes existing properties but also optimizes incremental housing, achieving two goals with one stone. According to research conducted by reporters, state-owned enterprises in Zhengzhou, Nanjing, Zhuhai and other cities have taken the lead in participating in the process of removing existing housing through direct acquisition and trade in. Preliminary statistics show that the planned purchase of housing in each city has exceeded 10000 units. What has attracted more market attention is that the central bank has promptly established a special refinancing tool -300 billion yuan of affordable housing refinancing, encouraging and guiding financial institutions to follow the principles of marketization and rule of law, and supporting local state-owned enterprises to purchase completed but unsold commercial housing at a reasonable price for use as allocated or leased affordable housing. Industry experts believe that revitalizing stock is the key to resolving real estate risks. In the sluggish real estate market, the original circulation of property and funds has been disrupted, making it difficult to sell houses to residents according to the original plan. Real estate companies and local governments are facing the problem of inventory backlog. With the support of new tools, local state-owned enterprises can become new buyers of houses on the market, bridging the market cycle. From the perspective of revitalizing stock, assets such as land have also become objects of revitalization. Vice Minister of Natural Resources Liu Guohong previously introduced at the press conference of the State Council Information Office that the Ministry of Natural Resources is preparing to introduce policy measures for the proper disposal of idle land and the revitalization of existing land based on extensive research. "It is expected that the real estate industry will continue to adapt to the changes from the incremental era to the stock era, as well as the changes in supply and demand relationships and long-term trends, shifting from total expansion to a combination of transformation, destocking, digestion, and improvement, adjustment, and optimization in stock." Pang Ming, Chief Economist and Director of Research at JLL Greater China, said. Industry insiders believe that although this round of policy adjustment has been significant, it has not changed the consistent policy orientation. More importantly, it is not to follow the old path of "relying on real estate to drive the economy", but to play a greater role in market mechanisms and accelerate the transformation of the real estate industry towards a new development model. On May 17th, the national video conference on effectively ensuring the delivery of housing pointed out the need to continue to do a good job in preventing and disposing of debt risks in real estate enterprises, and solidly promote the construction of affordable housing, urban village renovation, and the construction of public infrastructure for both emergency and emergency use. "It is expected that the 'three major projects' will be combined with the optimization and adjustment of regulatory policies in the real estate industry, becoming a new starting point, new grip, and new driving force for promoting the optimization of the real estate industry structure and building a new model of real estate development." Pang Ming said. Wen Bin, Chief Economist of China Minsheng Bank, stated that the foundation for building a new development model lies in ensuring the delivery of housing. The Ministry of Housing and Urban Rural Development arranges and connects from the land side to the project side through a coordination mechanism. It is necessary to control the increment of land and projects, as well as activate the existing land and projects, and form a scientific allocation between affordable housing and commercial housing, in order to build a new model for the development of the real estate industry in the long run. (Lai Xin She)