The most noteworthy change in the package of policies recently rolled out by the authorities to boost the flagging real estate sector was the one encouraging city governments to organize local State-owned enterprises to purchase unsold commercial houses as government-subsidized housing.

The central bank earmarked 300 billion yuan ($41.4 billion) for government-subsidized housing reloans, encouraging and guiding financial institutions to support local SOEs purchasing unsold commercial housing. Following such principle requirements at the national level, more detailed and guideline documents are likely to be formulated in the near future. In fact, local SOEs in several cities such as Zhengzhou and Qingdao have piloted the purchase of commercial housing for this purpose in the past few years, and the latest central government initiative only means more intensive actions.

The purchase of commercial housing by SOEs seems like a problem for the real estate sector, but the key to its effectiveness lies in whether it can stop the decline in the real estate sector, promote the delivery of purchased houses to buyers, facilitate the benign circle between real estate upstream and downstream enterprises, and smooth the cycle between real estate, government finance, financial institutions and related industries.

At present, a number of measures rolled out by central and local governments will take care of real estate inventory and accelerate the supply of affordable government-subsidized housing.

All latest real estate initiatives need to further focus on the core goal of smoothing the cycle of the entire economic system in order to better stabilize the fundamentals of the economy.

First-tier cities should make greater efforts to stabilize the real estate market by liberalizing purchase restrictions more vigorously and introducing a more clear purchase plan for SOEs.

The advantage of this approach is that it gives local governments the autonomy to take decisions on the basis of local conditions. However, from the perspective of the urgency of stabilizing the real estate market, core and key cities need to do more, and only in this way can local governments, financial institutions and enterprises overcome their difficulties and work together to solve the "one-stop" problem of financing, buying and lending.

Relevant departments should also roll out preferential tax policies for the purchase of commercial housing for affordable housing.