Editor's note: Zou Linhua is a research fellow at the Institute of Financial Strategy, Chinese Academy of Social Sciences. The article reflects the author's opinions and not necessarily the views of CGTN.

China's National Bureau of Statistics on Wednesday released information about the basic situation of the national real estate market in the first nine months of 2023, with latest monthly data showing that the real estate industry is gradually stabilizing under recent pro-growth policies.

During the period from January to September, the national real estate development investment, sales area and volume continued to decline on a year-on-year basis. The real estate development prosperity index had been declining for five consecutive months.

However, looking at the monthly data for September, real estate development investment, new construction area and sales area and volume all showed significant improvement compared to August. This suggests that the real estate sector is gradually stabilizing under the recent series of supportive policies.

From the sales perspective, from January to September, the floor space of commercial buildings sold in the country was approximately 848 million square meters, a year-on-year decrease of 7.5 percent, while the sales area of residential buildings decreased by 6.3 percent year on year.

Real estate sales amounted to approximately 8.9 trillion yuan ($1.2 trillion), a year-on-year decrease of 4.6 percent, while the sales volume of residential buildings decreased by 3.2 percent year on year.

The floor space of commercial buildings sold in September declined by 10.2 percent, narrowing by 2 percentage points compared to August.

The transaction data for residential buildings in 70 large and medium-sized cities showed combined positive growth of new and pre-owned houses in September, increasing by 2.8 percent compared to the previous month, marking the first positive growth after five consecutive months of decline.

Overall, although the sales situation improved in September, the scale is still below the level of the same period of last year, indicating that there is still space for the scale of sales to rise, and there is still a gap between the actual effects and expectations.

Regarding development investment, various indicators continued to decline. From January to September, the investment in real estate development decreased by 9.1 percent year on year.

From January to September, the housing construction area of real estate developers decreased by 7.1 percent year on year, and the newly started housing construction area decreased by 23.4 percent.

These data reflect that real estate companies are transitioning away from the "high-leverage, high-inventory, and high-debt" model, adopting more cautious business strategies, showing less willingness to acquire land, while prioritizing quality and efficiency.

As the changes in real estate development investment data usually lag behind the changes in sales data by about six months to a year, the continued decline in this indicator does not have any significant directional meaning.

In terms of funds for investment brought in by real estate development companies, from January to September, funds brought in decreased by 13.5 percent year on year, continuously declining for several months.

In terms of specific components, although the cumulative declines in deposits and prepayments and individual mortgage loans continued to expand, the cumulative declines in domestic loans, the utilization of foreign funds, and self-raised funds have narrowed compared to the previous month.

In addition, favorable financial policies, including the "16 Financial Measures," have shown effects in supporting real estate company financing. The overall speed of industry fund outflows has slightly slowed down, and domestic financial institutions and foreign funds have slightly increased support for the industry's funding.

With the gradual implementation of the financial policies, the funding pressure on enterprises is expected to be further alleviated.

Looking ahead to the fourth quarter and 2024, it is expected that the initial effects of the policies will further manifest, and the support in terms of land, finance, and sales policies will continue to increase.

More first-tier and second-tier cities may further optimize real estate policies and increase support for affordable housing market.

The expectations of homebuyers, real estate companies, and financial institutions will further improve, gradually restoring confidence in the real estate market.