China announced plans to accelerate urban renewal and stabilise the property market in 2026, marking the start of its latest Five-Year Plan (2026–2030), according to a readout from a national housing policy conference held in Beijing on December 22–23.

Urban Renewal as a Policy Priority

The conference outlined key housing and urban development objectives for the Five-Year Plan period, emphasizing urban renewal as a critical focus area. Authorities pledged to vigorously renovate urban villages, enhance city infrastructure, and improve the overall urban environment to support sustainable city development.

Officials highlighted that stabilising the real estate market is a top priority, aiming to prevent and mitigate risks while ensuring affordable housing supply for residents. Measures will include supporting local governments in purchasing existing homes to convert them into affordable housing units, especially for low-income households.

Challenges in China’s Property Sector

China’s property sector, historically a key driver of economic growth, has faced a persistent slowdown since mid-2021, with weak home sales and falling prices impacting consumer confidence. With approximately 70% of household wealth tied to real estate, housing stability remains a significant concern for policymakers.

Developers have also experienced liquidity strains, as exemplified by China Vanke’s recent approval to extend the grace period for a 2 billion yuan ($284 million) bond repayment due December 15. Such measures reflect the ongoing challenges faced by major developers in navigating financial pressures.

Targeted Housing Market Measures

To stabilise the housing market, officials indicated that policies would be tailored to local conditions to manage supply and reduce excess inventory. Key initiatives include:

• Promoting the sale of finished homes, allowing buyers to physically verify properties before purchase.
• Strengthening the “project whitelist” mechanism, which expedites bank financing for stalled residential projects.
• Encouraging city governments to adjust and optimise property policies to meet local market needs.

On risk control, authorities plan to follow market-oriented and rule-of-law approaches to address developer debt risks, tighten oversight of presale funds, and protect homebuyers’ rights.

Focus on Affordable Housing

China will continue to provide housing support for low-income urban households, particularly young people and other vulnerable groups. Targeted measures are expected to ensure that basic housing needs are met, contributing to social stability and inclusive urban development.

The policy conference positioned 2026 as a critical year for implementing these measures, signaling a renewed commitment to both urban renewal and housing market stability as China enters its next development cycle.