One of the important announcements made by the Central Economic Work Conference is to reduce industrial overcapacity, typically represented by the real estate.

ANBOUND research team, however, pointed out that the local governments and the market should not have too high an expectation on the central government's policy to destock housing inventory. The central government’s policy is to destock instead of stimulation.

The following few trend will not change: -

(i)The real estate market will continue to be weak until normalization;

(ii)The mode of "land finance" relied by the local government will be terminated permanently and it will turn into urban renewal and

(iii)The local economy will turn to other industries.