Enhancing supply-side regulation to activate existing inventory as a key lever for the real estate market

The Securities Times reporter, Zhang Da

As an important industry in the national economy and a major source of residents’ wealth, the direction of real estate development has attracted widespread attention. A close reading of the “15th Five-Year Plan” (2026–2030) outline shows that “revitalizing existing stock” has become one of the core keywords for real estate development in the next five years.

The “15th Five-Year Plan” outline not only puts forward requirements from the source of land supply—“coordinated with stock housing, population changes, etc.”—but also specifies a series of revitalization policies for existing stock land, projects under construction, stock commercial housing, and so on. It clarifies that land that has been supplied but not yet developed and projects under construction must be “handled in a categorized manner,” and that stock commercial housing and idle commercial and office properties should be advanced for “revitalization and utilization,” etc.

Why does the “15th Five-Year Plan” outline place such emphasis on revitalizing real estate inventory? Wang Rumin, a researcher at the Development Research Center of the State Council, told The Securities Times reporter that after urbanization enters a stage of stable development, in some cities the intensity of land development for net population inflows has already exceeded the international warning line of 30%, and in some cities it has even exceeded 50%. This forces cities to develop from existing stock land, thereby creating space for upgrades in industries and residential quality.

Liu Lin, a researcher at the Macro Economic Research Institute of the National Development and Reform Commission, said that the main problems in the market today are high real estate inventory and difficulty in destocking. As of the end of February 2026, the area of commercial housing for sale in China is nearly 800 million square meters, at its highest level in history. In addition to the area for sale, the inventory pressure from projects under construction and land already supplied but not yet developed is also substantial. Moreover, due to factors such as overly high planning配比, commercial and office assets and parking garages have been supplied in excess for the long term, making destocking pressure far greater than that for commercial residential housing. This inventory ties up large amounts of capital for real estate companies, not only constraining liquidity, but also affecting developers’ investment capacity. It also further exacerbates operational risks for real estate companies due to ongoing financial costs.

Wu Jing, Director of the Henglong Real Estate Research Center at Tsinghua University, believes that destocking pressure in real estate is high and demand recovery is uncertain, so it urgently needs to adjust from the supply side as the core measure to resolve market pressure. The outline’s emphasis on inventory is consistent with the “city work conference” at the central government level, which proposed that “the focus of city development should shift to improving stock quality and efficiency.” The key to implementation is that each city must apply categorized policies to different types of inventory assets, and explore replicable models in the process of gradually advancing implementation.

For stock commercial housing, the central government has clearly encouraged the acquisition of existing homes to be used for保障性 housing, and supports local governments in issuing special-purpose treasury bonds to increase acquisition funds. This has become an important measure for resolving real estate inventory and improving the housing保障 system. Since 2025, the work of acquiring and warehousing stock housing has been continuously advanced in various places. According to incomplete statistics, as of now, more than 60 cities nationwide have explicitly supported the acquisition of stock housing. According to monitoring by the China Index Academy, since 2025, provinces including Zhejiang and Sichuan have issued special-purpose bonds exceeding 4.3 billion yuan in total for acquiring stock commercial housing for保障 housing.

Liu Lin told the reporter that, in addition to local governments’ special-purpose treasury bonds, the support policies for acquisition/stocking funds also include housing rental group purchase loans and re-loans for保障 housing. As cities explore the process of acquiring and warehousing stock properties, support policies continue to be optimized, and the acquisition scope has expanded to all types of eligible completed or unsold properties under construction, judicially disposed properties, and stock secondary housing sources. After the acquisition and warehousing of stock properties, the intended uses have expanded from保障 housing to include resettlement housing, dormitories for students or enterprises, talent housing, and so on.

Funding is the fundamental guarantee for implementing the acquisition and warehousing of stock commercial housing. Ni Pengfei, researcher at the Chinese Academy of Social Sciences’ Institute of Finance and Strategy and Director of the Center for Cities and Competitiveness, suggested that the country should build a diversified acquisition/warehousing model led by the government with social participation, and also build a diversified funding system led by the government, including expanding the scale of special-purpose treasury bonds, expanding the scale of policy loans, supporting commercial bank loans, attracting social capital to participate, and so on. At the same time, the acquisition/warehousing work also needs to be integrated with new home renovations and city quality improvements, integrated with releasing improved demand, and integrated with old home renovations. In addition, it is also necessary to establish a reasonable system of incentives, constraints, and guarantees.

As for the revitalization and utilization of idle commercial and office properties, Liu Lin said that in the past, various places have been promoting this—for example, providing tax incentives to support business model adjustments. In the future, they may explore more revitalization paths.

Wu Jing suggested that for office properties under construction, or even those just completed but not yet in use, the conversion of use should be considered promptly. For office properties that are temporarily suspended or have been idle for a long time, use conversion should be prioritized as the revitalization approach. For the scope of acquisition and renovation of completed commercial housing, it should be expanded to include office properties. At the same time, she encouraged and supported existing office properties in pursuing differentiated competition, including differentiated hardware and software conditions and differentiated industrial positioning.

Regarding idle stock land, Wang Rumin pointed out that it can mainly be divided into three categories: low-efficiency industrial land; land held by distressed real estate companies; and land auction lots by local government financing platforms or state-owned enterprises. For the latter two categories, acquisition/warehousing could be considered. For low-efficiency industrial land, Singapore’s “white land”制度 can be referenced to explore conversion pathways among different land uses, providing rich policy support for converting to industrial-to-office, industrial-to-residential, and commercial-to-residential. For social capital and enterprises that actively participate in advancing the revitalization of stock land, a certain proportion of “white land” plots should be created, allowing land users that meet conditions to change land use according to actual needs in the future, thereby providing effective incentives for social capital to actively participate in urban stock renewal and related efforts.

However, Wang Rumin also pointed out that many stock lands, stock housing units, and projects under construction are difficult to revitalize because the underlying debt relationships are complex and hard to resolve. After asset values decline, acquisition funds often cannot cover the debts behind those assets, and the relevant interest entities have major disagreements about sharing the losses.

Earlier, the central government also supported local governments in issuing special-purpose treasury bonds to repurchase stock idle land. In pilot areas where special-purpose treasury bonds are “self-audited and self-issued,” repurchase projects using special-purpose treasury bonds have already been implemented. According to incomplete statistics from the China Index Academy, as of the end of February 2026, across the country 28 provinces have disclosed total amounts exceeding 770 billion yuan planned to use special-purpose treasury bonds to acquire idle stock land, with actual issuance of special-purpose treasury bonds exceeding 335 billion yuan, accounting for about 43%.

A relevant person in charge at the China Index Academy expects that in the future, local governments may accelerate the pace of acquiring and warehousing idle stock land, while also better matching market land demand with more optimal plans by reasonably adjusting land planning, swapping land, and so on. In this process, support and encouragement for cross-city and cross-district land swaps, as well as supporting policies for land planning adjustments, still need to be further improved to unblock bottlenecks.

“To achieve the policy goal of destocking the real estate market, besides encouraging demand-side policies, supply-side regulation is equally important,” Liu Lin said. Revitalizing existing stock has a positive role in accelerating destocking and promoting the market to stabilize as soon as possible. Next, it is expected that the intensity of supply-side regulation in real estate will be greater, and medium- to long-term institutional reforms are likely to be advanced. This is conducive to establishing a new model for real estate development, promoting long-term market stability, and ultimately driving high-quality development of real estate.

（责任编辑：董萍萍 ）

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