(Yicai Global) April 29 -- The Chinese Communist Party’s Political Bureau held a meeting today to assess the country’s economic situation.

It emphasized keeping the economy operating within a reasonable range and assisting local governments in improving real estate policies in light of local realities and supporting people’s housing needs.

A number of industry insiders told Yicai Global that “stabilizing the real estate industry” is an important part of “stabilizing the economy.” It is expected that under the premise of “houses are for living in and not for speculation,” local authorities will roll out city-specific policies, and will step up and accelerate support for local property markets.

Chinese real estate stocks soared after the lunch break, with the Shenyin & Wanguo Securities Real Estate Index closing up almost 3.4 percent. More than 10 stocks gained by their daily limit, and over 30 surged by more than 5 percent.

The Politburo’s statement reflects the government’s clear and positive stance on the property sector, said Xu Xiaole, the chief analyst at Beike Research Institute. That means local authorities will gain more autonomy over policy, and the more restrictive policies are expected to be eased, which will help to release housing demand.

According to incomplete statistics, more than 16 Chinese cities have eased curbs on the real estate market to some extent, including purchase, loan and sales curbs, since the start of this month.

The policy relaxation will gradually spread from small grassroots cities with relatively weak housing demand to hotspot cities, including provincial capitals, according to Li Yujia, the chief researcher at the Center of Housing Policy Studies of Guangdong Urban & Rural Planning and Design Institute.

Transactions in hotspot cities account for more than 65 percent of China’s total property sales, and the performance of the property market in these cities is crucial to achieving the goal of stabilizing the real estate industry, Li said.

But he also pointed out that “given that the Politburo meeting still emphasized ‘housing is for living and not for speculation,’ there’ll still be a bottom line for local policy adjustments and property prices will not be allowed to rise unattended.”

In addition to the gradual relaxation of restrictive policies, Beike Research Institute’s Xu believes that the government’s strict management of pre-sale funds for real estate developers will also be loosened “to substantially relieve developers’ financial pressure.”

Editors: Tang Shihua, Peter Thomas