(Yicai) Dec. 12 -- China has made real estate market stabilization a main priority for next year, with the authorities signaling an intensified push to reduce existing housing inventory as part of broader efforts to contain risks in key areas.

Real estate policies should be tailored to local conditions to control the increase of new homes, reduce the housing stock, and enhance supply, according to the two-day Central Economic Work Conference, which sets China's economic agenda for the year ahead and which concluded in Beijing yesterday.

Policy will also encourage the acquisition of existing housing for use as affordable homes, deepen reform of the housing provident fund system, and promote the orderly construction of “quality homes,” while accelerating the development of new real estate models.

Compared with last year’s emphasis on “optimizing stock,” this year’s focus on “inventory reduction” reflects ongoing pressure in a market with relatively weak overall demand, Feng Bo, vice president of Chengdu Urban Construction and Development Research Institute, told Yicai.

Stepped-up efforts will be needed next year to lower housing stocks and restore a balance between supply and demand, Feng added.

“Inventory reduction” is the key policy term for 2026, said Yan Yuejin, VP at E-House China Research and Development Institute. According to the Shanghai-based think tank’s housing inventory report on 100 Chinese cities, destocking reached a record high 27.4 months in November.

The supply of affordable homes will mainly come from existing housing stocks, Yan pointed out, adding that while new homes dominate at the moment, there is potential to expand the program to include second-hand properties in the future.

The work conference also called for promoting high-quality urban renewal. This is a major strategic focus of urbanization, which emphasizes shifting from scale expansion to qualitative improvements, requiring a systematic, comprehensive effort, said Wang Yeqiang, a deputy director and researcher at the Chinese Academy of Social Sciences' national future city lab.

Regarding the reform of the provident fund system, Li Yujia, chief researcher at Guangdong Housing Policy Research Center, said that as a key inclusive financial tool, the loan-to-contribution ratio remains low in some cities.

So it is necessary to step up disbursement or adjust surpluses and shortages, optimize the business environment for inter-regional loans, and support the expansion of new models that marry renting and buying, according to Li.

Editor: Martin Kadiev