China launched the third round of housing reform and officially entered the Singapore model
The Hong Kong model withdrew and the Singapore model officially took the stage.
This document was published for two full months, and everyone has not noticed it until today.
The Economic Observer reported on October 26 that the document "Guiding Opinions on Planning and Construction of Affordable Housing" (Guo Fa [2023] No. 14) deliberated and adopted by the State Council on August 25 was officially issued by the State Council on September 1. Recently, it has been conveyed to the people's governments of various cities and agencies directly under the ministries and commissions.
Document No. 14 specifies two major objectives:
The first is to increase the construction and supply of affordable housing, "let wage income groups gradually realize that residents have their own homes, eliminate the anxiety of not being able to buy commercial housing, and free their hands and feet to strive for a better life";
The second is to promote the establishment of a new model of transformation and development of the real estate industry, return commercial housing to commodity attributes, meet the demand for improved housing, promote stable land prices, stable housing prices, stable expectations, and promote the transformation and high-quality development of the real estate industry.
Because the document clearly puts forward "using reform and innovative methods to plan and build affordable housing in large cities" and "promoting the establishment of a new model of transformation and development of the real estate industry", the status of affordable housing has been unprecedentedly improved, and the relationship with the positioning of the market is clear, and it has been called "new housing reform plan" by officials in many places.
Note three key points:
1. Increase the construction and supply of affordable housing
2. Let commercial housing return to commodity attributes
3. New housing reform plan
That is to say, commercial housing belongs to commercial housing, and affordable housing belongs to affordable housing. In the next decade, the real estate market will completely change.
Let's take a look back at the history of real estate transformation:
The first housing reform: In 1998, the state officially launched the first housing reform, housing entered the era of commercialization, and the era of welfare housing faded.
Second housing reform: In 2008, housing was established as a quasi-public good, and the basic direction was to provide housing services led by the government.
The third housing reform: In 2023, completely abandon the Hong Kong model and benchmark against the Singapore model. Commercial housing belongs to commercial housing, and affordable housing belongs to affordable housing.
What is the Singapore model?
There are no house slaves in Singapore, because 80% of Singaporeans live in HDB flats, and they do not need to carry high mortgages.
If you are an ordinary person, you buy the HDB flat provided to you by the government, although this house is a low-cost house, but people live in it very comfortably, convenient transportation, complete supporting facilities, because the government has a lot of subsidies to you, generally speaking, a Singapore family may be able to afford HDB flats in about four years.
If you are a rich Singaporean or foreigner, then you can also choose to go to the commercial housing market to buy high-end residences, as you like.
To put it simply, Singapore's housing market is divided into two completely different markets, commercial housing is commercial housing, and HDB flats are HDB flats.
In essence, Shenzhen, as a reform demonstration zone, began to imitate Singapore for affordable housing reform a few years ago.
One of the most important moves is the "closed circulation", which completely blocks the dream of the ownership elite to become rich through this road.
Future Shenzhen real estate structure pattern: 40% commercial housing, 60% co-ownership and public rental housing.
40% of commercial housing: can be speculated or risen, ensure local fiscal revenue, and can smoothly collect real estate tax.
60% of co-ownership and public rental housing: housing is not speculated, which provides support for Shenzhen to retain talents.
There is not enough money, where can we get 60% of shared ownership and public rental housing?
It doesn't matter, in connection with the trillion national debt policy the day before yesterday, it must be the central government that gives money. At the beginning of the year, there were reports that the central government subsidized Shenzhen to carry out housing reform, which is rare in decades. "Central financial subsidy for Shenzhen, rare for decades".
The new housing reform plan will be a fatal blow to those who hold second-hand properties. Because those who could not afford to buy new houses in the past will be forced to buy urban old and dilapidated and sub-new new needs, and no one will buy these properties in the future rather apply for affordable housing.
At the same time, the new housing reform plan also helps to stabilize the basic situation of the real estate market, which has a positive effect on stabilizing land prices, stabilizing housing prices and stabilizing expectations.
Finally, to sum up:
Central subsidies, closed operation, guaranteed right of residence. The market returns to the market, the limit price is relaxed, and the commercial housing returns to the commodity attribute.
The new era is really here.