The authorities will continue to rein in speculation to stabilize the real estate market, but given the strong demand for housing in first-and second-tier cities, housing prices there are unlikely to decline in the short term.

The measures to control housing prices, however, will continue and could even expand to more third-and fourth-tier cities. And owing to the deflating asset price bubble, banking and financial institutions will make greater efforts to strengthen fund supervision, in order to avoid inflow of speculative funds into the real estate market.

The authorities will also take steps to meet people's demand for improved living conditions. The 19th Party Congress decided to take measures to expand the middle-income group and increase people's incomes. And since members of the expanding middle-income group will likely be the majority of homebuyers, they will continually release the mid-to-high level demand and thus promote the healthy and steady development of the realty sector.

The 19th Party Congress also decided to establish a system that would ensure housing supply through multiple sources, housing support through multiple channels, and encourage both housing purchase and renting. Supply through multiple sources indicates more social funds could be used in the housing supply-side structural reform. Support through multiple channels indicates various housing channels will be developed, including affordable housing by local governments and joint property rights housing. And the decision to encourage both housing purchase and renting shows the central government's determination to develop the housing rental market.

Which means the development of the housing rental market, expansion of housing rental business and increase in the proportion of rental houses in residential housing will become important parts of the housing sector reform.

Rental housing will be the key to increasing housing supply and stabilizing the realty market. To develop and expand the housing rental market, the central government has launched pilot programs in 12 big cities, including Shanghai, Hangzhou and Guangzhou. The supply of land for rental housing in these cities, some of them in good locations, has increased remarkably in recent times, which shows that even local authorities are determined to develop the housing rental market.

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