A senior Chinese government official signaled that price fluctuation in the domestic property market is generating opportunities for the financial sector, adding the authorities will not approve of excessive fluctuation in the sector, according to a press conference held by the State Council Information Office on Wednesday. 

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said that a house price adjustment and changing market dynamics is a good thing for the financial industry.

"But we don't want the changes to be too drastically, which will bring too much impact on the economy," he said. "The transition ought to be made stable."

China's property market has showed signs of cooling since the second half of 2021, with both sales volume and home price dropping in a good number of Chinese cities.

In 2021, the selling price of residential properties stood at 10,139 yuan($1,606) per square meter on average, up 2.8 percent on a yearly basis, the lowest growth rate in about five years, data from the National Bureau of Statistics showed. 

The correction in China's house price surge has prompted domestic financial institutions to update their property related financial services in order to adapt to changing dynamics on the market. The China Construction Bank, for example, has launched an app called JianrongJiayuan that focuses on the long-term rental business. 

Chairman of the bank Tian Guoli said on Wednesday that the time has passed when people could count on steep home price appreciation to make a big fortune, and that the number of renters in the population would rise as the housing market matures. 

According to Tian, the problem of housing for wage-earners cannot be easily resolved no matter how home prices drop in the future, and that affordable rental is a good way out for them. 

"It comes down to the saying that houses are for living, not for speculation," he said. 

Guo said that it's meaningful to provide appropriate financial services, as people still have demands for homes despite the fact that real estate market had seen a drop in transaction activity.

He noted that China's property bubbles and excessive monetization of the sector have been curbed, thanks to the government's strenuous efforts to resolve financial risks with measures like restricting shadow banks and non-performing loans.

Global Times