China will optimize its policies pertaining to the property sector and scale up the supply of high-quality housing projects so as to ensure the stable and healthy development of the real estate market, the State Council, the country's Cabinet, said on Friday.

It stressed at the State Council Executive Meeting, chaired by Premier Li Qiang, that the real estate industry chain affects a wide range of sectors, and has a direct bearing on the well-being of the people and overall economic and social development.

Over the past year, local governments have implemented region-specific measures — such as the timely delivery of presold homes and reductions in mortgage interest rates — to optimize regulation of the real estate market and effectively safeguard against systemic risks, the meeting said.

Going forward, the country will further optimize its real estate policies, with a special focus on the timely delivery of housing projects, thus ensuring people's essential needs and maintaining market stability.

Efforts will be made to put in place a coordinated mechanism for urban real estate financing and develop supportive policies, so as to stimulate potential demand, increase the supply of high-quality housing, and promote the stable and sound development of the property market.

In response to evolving trends in new urbanization and changing supply-demand dynamics in the real estate market, steps will be taken to improve the market-oriented housing supply system, reform foundational regulations related to commercial properties and foster a new model for real estate development, the meeting said.

Investment in property development in China fell 9 percent year-on-year to some 1.18 trillion yuan ($163.81 billion) in the first two months, National Bureau of Statistics data showed Monday.

Despite undergoing a period of transition, China's real estate sector still enjoys great potential and space for development over the mid to long term, said Ni Hong, minister of housing and urban-rural development, at a recent news conference.

There are currently more than 30 billion square meters of urban housing in the country waiting to be upgraded and restored, Ni said.

In a separate meeting, also on Friday, Premier Li stressed the importance of intensifying efforts to dissolve local government debt risks, addressing associated debt risks stemming from financing vehicles and clearing overdue payments to businesses, in order to appropriately manage existing debt risks while preventing the accumulation of new debt.

Meanwhile, efforts will be made to establish long-term mechanisms that effectively prevent local government debt in breach of regulations or disguised forms, Li added.