Shanghai announced policies to optimize housing supply standards in order to better address new buying demand, said experts on Thursday.

The Shanghai government revised the definition of small and medium-sized apartment categories on Tuesday, with the standard gross floor area of flats in both categories now being expanded by 20 square meters at most.

"The new criteria will give real estate developers more free play to optimize home designs in accordance with market needs, and it also echoes the new trend that homebuyers want more spacious and comfortable rooms," said Yan Yuejin, vice-president of the Shanghai E-House China Real Estate Research Institute.

Under the new standards, flats in high-rise residential apartment buildings above 10 floors can have up to 120 sq m in gross floor area in comparison to 100 sq m before," Yan said.

The adjustment is based on Shanghai residents' average living space, family structure, market demand, and housing design and construction. It looks to adapt to the latest market supply and demand conditions, people's expectations for prime quality housing, as well as better fit people's diversified home living requirements, said the notice on optimizing the city's real estate market's stable and healthy development.

Experts said the new adjustments to the housing supply structure officially end the previous criteria under which the majority of newly developed housing units are sized between 90 and 100 sq m.

"Larger-sized residential apartments will be built in Shanghai, and people will have more choices when they look to change living conditions," said Chen Julan, a senior analyst at the China Index Academy in Shanghai.

"Property developers will be encouraged to invest in new housing project development, which is expected to improve new home supply efficiency," Chen said.

Guan Rongxue, a senior analyst at the Zhuge Real Estate Data Research Center, said the changes in housing standards in Shanghai are in line with the city's market demand.

"Since the beginning of the year, Shanghai's new home sales have been led by diversified needs for improved living, and transactions of large-size apartments carrying hefty price tags perform well," Guan said, adding that the supply restructuring will allow more large-sized apartments to be available in Shanghai in the future.

Li Yujia, chief researcher at the Guangdong Planning Institute's residential policy research center, said Shanghai's new housing standards are in line with the central authorities' latest stand and market trends.

"The third plenary session of the 20th Central Committee of the Communist Party of China made it clear that relevant cities are allowed to eliminate different definitions for housing," Li said.

According to Li, as many as 43 percent of the pre-owned homes traded in the first seven months in eight key Chinese cities were sized above 90 sq m, while there is a rising proportion of bigger apartments in new home supply as well.

"It is worth noting that while more high quality and larger residential apartments will be available in the market, a balanced supply of various sized homes should be ensured for meeting diversified living requirements," Li said.

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