This year, the transformation point of the real estate market policy appeared on July 24, the meeting of the Political Bureau of the Central Committee clearly stated that "it is necessary to effectively prevent and resolve risks in key areas, adapt to the new situation of major changes in the supply and demand relationship of the mainland real estate market, adjust and optimize the real estate policy in a timely manner, and make good use of the policy toolbox according to the city's policies, so as to better meet the needs of residents for rigid and improved housing, and promote the stable and healthy development of the real estate market."
Since then, the continuous optimization policy has opened up space and imagination for the property market in various places, including the return of the land market to the highest price, the relaxation of the "five restrictions", the promotion of the model of existing house sales, the "explosion-proof thunder" of financial supervision, and the encouragement of "high-quality and high-price" commercial housing. In terms of optimizing demand-side housing purchase policies, supporting the financing of real estate enterprises, and increasing the construction of affordable housing, it has frequently expressed its stance and implemented specific measures to release positive signals to the outside world.
In the future, how will the 10 trillion real estate market get back on track? How will the risks encountered by real estate enterprises be resolved? How will the problem of "guaranteed delivery of buildings" be solved? and what changes will be ushered in from the land market to commercial housing and affordable housing?
Keyword 1
The multi-city land market returns to "the highest price wins"
Since 2023, the sentiment of the national land market has been weak, and real estate companies are generally cautious about acquiring land. According to the statistics of the China Index Research Institute, from January to October this year, 380 million square meters of residential land were launched in 300 cities across the country, down 31.8% year-on-year, and the absolute scale was the lowest in the same period in the past ten years, the transaction area was 260 million square meters, down 35.4% year-on-year, and the land transfer fee was 1.8 trillion yuan, down 25.3% year-on-year.
In terms of the popularity of land auctions, only a small number of cities or regions maintain a certain degree of popularity, and real estate investment focuses on core high-quality land plots, further intensifying market differentiation. Among them, in October, the land plots in the core areas of Shanghai, Beijing, Chengdu and other core areas received high attention from enterprises, some of the plots reached the top of the lottery, and the rest of the land plots were mostly traded at the reserve price;
It is worth noting that, according to media reports, at the end of September this year, the Ministry of Natural Resources has issued a document to the provincial natural resources authorities, including "it is proposed to cancel the land price restriction in land auctions" and "it is proposed to cancel the 1.0 limit on the plot ratio of the far suburbs". Subsequently, Chengdu, Jinan, Xiamen, Qingdao, Nanjing, Suzhou and other cities issued announcements to adjust the previous land auction rules, and all proposed that some land plots will no longer be limited to the upper limit price of land transfer. On October 30, among the 10 land transactions in Jinan, 3 of the land premiums exceeded 50%. On November 2, two of the five land parcels transacted in Hefei had a premium rate of more than 30%.
From the current point of view, under the situation of low-level operation of the land auction market in many places, the adjustment of land auction rules, especially the no longer restricting land prices and restoring the "highest price gets" is becoming a new trend. In this regard, Zhang Hongwei, founder of Jingjian Consulting, said that after the ministry's policy has made it clear that the maximum land price limit policy can be abolished, more cities may adjust the land transfer rules in the future.
Zhang Kai, head of the land market research of the China Index Research Institute, believes that the policy of abolishing the upper limit of land price is to increase the income and reduce the risk of local governments, and the differentiation of the urban sector is intensified; for the real estate enterprises, it is to reduce profits and rely on ability; and for the home buyer group, it is to promote improvement, stabilize housing prices, and stabilize expectations.
"The core plots of hot cities may heat up, but high-priced land may not appear frequently. In core cities, most of the small and medium-sized real estate enterprises are under pressure on their capital and the pressure on land acquisition is increasing, while the financial strength of central and state-owned enterprises is relatively good, and the participation in auctions and land acquisition opportunities for high-quality land plots may increase. Zhang Kai said.
Chen Wenjing, director of market research at the China Index Research Institute, pointed out that after the upper limit of land prices was lifted, the popularity of land auctions for high-quality land plots has increased, but the differentiation is still there. In the short term, the reversal of local auction sentiment still depends on the recovery of the sales side, and the sentiment of local auctions is expected to further increase after the sales market activity in core cities is driven by policies.
Keyword 2
"五限" 逐渐放松
In 2017, in order to return the house to the attribute of "living", from the central to the local, measures were taken to "close" the liquidity of the real estate market. The "five restrictions" policy, which focuses on purchase restrictions, loan restrictions, price restrictions, sales restrictions, and business restrictions, has been introduced one after another, adding a "tight spell" to the property market.
However, since 2022, affected by the downturn in the property market, the "five restrictions" have been gradually relaxed. From the current point of view, restrictive policies have gradually relaxed from third- and fourth-tier cities to second-tier cities, and then to second-tier hotspot cities and first-tier cities.
For example, in March last year, Zhengzhou issued the "Zheng 19 Articles" to cancel the "mortgage and mortgage subscription", becoming the first city in the country to relax loan and purchase restrictions. Subsequently, Harbin announced the relaxation of restrictions on the sale of new houses, firing the "first shot" of the national relaxation of sales restrictions. At the end of March, Fuzhou also relaxed purchase restrictions.
In October this year, Shanghai's Jinshan District relaxed the restrictions on the purchase of talents, and eligible non-Shanghai talents can buy houses in the limited areas of the district. Prior to this, Guangzhou also reduced the social security period for foreigners to 2 years from 5 years to 2 years, and at the same time lifted the purchase restriction policy in some areas.
Chen Wenjing said that since the meeting of the Political Bureau of the Central Committee held on July 24 this year to set the tone for the real estate industry, various competent departments have successively implemented specific measures, and various localities have also followed up and implemented them according to their own market conditions. On the demand side, the Ministry of Housing and Urban-Rural Development, the People's Bank of China, and the State Administration of Financial Supervision issued a notice to include the first housing "recognition but not loan" into the "one city, one policy" toolbox; At the same time, all localities quickly followed up and implemented. In September 2023, the frequency of policies issued by various regions exceeded 90, the highest number since the fourth quarter of 2022, and policies such as purchase restrictions and sales restrictions were cancelled in many places.
On the whole, Chen Wenjing pointed out that at present, most urban policies in the country have been basically liberalized, and only the core cities have restrictive policies. From the perspective of policy effects, the implementation of a number of policies has a positive impact on market activity, but the sustainability of the driving effect is weak, and there is still room for further optimization of short-term demand-side policies, such as further reducing the cost of housing for residents, reducing the down payment ratio of the first and second houses in core cities, reducing transaction taxes and fees, and adjusting the identification standards for ordinary houses in Beijing and Shanghai.
Keyword 3
Development of affordable housing
On August 25, the executive meeting of the State Council deliberated and adopted the Guiding Opinions on Planning and Construction of Affordable Housing ("Circular No. 14"). Circular No. 14 sets out the basic principles for the construction and financing of affordable housing, the objects and standards of guarantees, the placement and management, and support policies, and the specific implementation measures shall be formulated by each locality. At present, this document has been conveyed to the people's governments of various cities and institutions directly under various ministries and commissions, and has entered the implementation period.
Specifically, Circular No. 14 clarifies two major goals: one is to increase the construction and supply of affordable housing, "to enable wage and salary earners to gradually realize home ownership, eliminate the anxiety of not being able to afford commercial housing, and let go of their hands and feet to strive for a better life";
It is worth noting that Circular No. 14 requires all localities to do a good job in policy convergence and coordinate the relationship between affordable housing and public rental housing, affordable rental housing and commercial housing. Affordable housing is an important part of the housing supply system, and the document fully emphasizes the status of affordable housing, and the construction of affordable housing will receive more attention in the future.
As a result, industry insiders expect that the pace of affordable housing construction and development will be further accelerated in the future, and the new model of promoting the development of affordable housing will be an important measure for the next round of real estate cycle.
Among them, Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, said that the mainland has established a "three-in-one" housing system of public rental housing, affordable rental housing and co-ownership housing. The new affordable housing is a placement type of housing, which should be well connected with the aforementioned "three-in-one" housing system.
Xu Yuejin, deputy director of research at the China Index Research Institute, believes that increasing the construction and supply of affordable housing is expected to have a positive impact on the economy and society from the perspective of improving people's livelihood and expanding investment, which will help inject new vitality into the real estate industry and drive the steady development of related upstream and downstream industries. At the same time, the supply of affordable housing is also conducive to promoting the return of commercial housing to commodity attributes and promoting the transformation and development of the industry.
Xu Yuejin expects that in the future, the affordable housing development model is expected to continue to innovate, and more social capital may participate in the development and operation of affordable housing to effectively expand the supply scale of affordable housing. At the same time, the construction and financing channels of affordable housing will also be more diversified, and the revitalization of various stocks will be an important channel for raising affordable housing. In addition, the construction of affordable housing will also be combined with the transformation of urban villages.
"The quality of affordable housing is expected to be improved, supporting facilities and public services are expected to be strengthened, and the living quality of affordable housing residents will be improved in the future. Xu Yuejin said.
Keyword 4
Existing house sales under the "guaranteed delivery building".
The "wave of loan suspension" in July 2022 has made "ensuring the delivery of buildings" an important livelihood project and political task. On July 28 of the same year, "guaranteed delivery of buildings" was first proposed at the meeting of the Political Bureau of the Central Committee. The real estate industry has a long industrial chain and is related to many upstream and downstream industries and fields, which is of great significance to stabilizing the macroeconomic market. Moreover, housing also embodies the expectations and yearning of buyers for the realization of a place to live, a happy place to live, and a better living life. Therefore, at present, "guaranteed delivery" is a major event in promoting the stable and healthy development of the real estate market.
It is worth noting that at the beginning of this year, at the National Conference on Housing and Urban-Rural Development, the Ministry of Housing and Urban-Rural Development asked local governments and real estate enterprises to pay attention to the reform of the pre-sale system, actively promote the existing house sales model, and mentioned that the conditions can be carried out for the sale of existing houses, and the continued implementation of pre-sale should put the responsibility of capital supervision in place to prevent the withdrawal of funds and the risk of new delivery.
In this regard, Yan Yuejin, research director of Shanghai Yiju Real Estate Research Institute, said that this is the first time that the Ministry of Housing and Urban-Rural Development has systematically and clearly put forward the concept of existing house sales, which also requires local governments and real estate companies to pay attention to the reform of the pre-sale system and actively promote the development of existing house sales models.
The sales of existing houses mentioned in the work conference of the Ministry of Housing and Urban-Rural Development is a fundamental measure to prevent the unfinished real estate. At present, off-plan sales and existing home sales are parallel, and existing home sales are encouraged, which also means that the mainland will promote the gradual transition from the off-plan sales system to the existing home sales system. According to the data of the National Bureau of Statistics, from January to September 2023, the sales area of existing commercial residential buildings nationwide will be 130 million square meters, a year-on-year increase of 21.2%, accounting for 17.9% of the total sales area, an increase of 4 percentage points from the end of 2022.
Chen Wenjing pointed out that compared with the pre-sale system, the sales of existing homes are more in line with the public's expectations for the sales of commercial housing. Since the beginning of this year, the central ministries and commissions and local governments have frequently mentioned that existing house sales have been proposed, and the National Housing and Urban-Rural Construction Work Conference held at the beginning of the year proposed that "existing house sales can be carried out if conditions permit". Subsequently, the Henan Provincial Housing and Urban-Rural Construction Work Conference made it clear that "Zhengzhou and Kaifeng will be used as pilot projects to actively explore the reform of the pre-sale system and the sale of existing houses"; Hefei also proposed to pilot the sales of existing houses in some areas. In addition, in the land auction rules of Shenzhen, some land plots have also been changed from "bidding for self-owned rental housing" to "bidding for the sales area of existing houses".
However, Chen Wenjing further said that the full implementation of existing home sales in the short term will have an impact on the market supply capacity, and put forward higher requirements for developers' financial strength and real estate financial support models. On the whole, the reform of the pre-sale system in the future may become an important part of the new development model, but the current off-plan housing sales are still the absolute mainstream mode of commercial housing sales in the mainland.
Keyword 5
Financial regulation shifts to "explosion-proof mines"
From October 30th to October 31st, the Central Financial Work Conference held in Beijing mentioned that it is necessary to promote a virtuous cycle of finance and real estate, improve the main supervision system and capital supervision of real estate enterprises, improve the macro-prudential management of real estate finance, and meet the reasonable financing needs of real estate enterprises with different ownership systems without discrimination. This is the first time that the Central Financial Work Conference has proposed to "improve the main body supervision system and capital supervision of real estate enterprises", pointing out the path and direction for the supervision of the real estate industry.
In Li Yujia's view, the statement of the Central Financial Work Conference on real estate reflects the unity of risk prevention and benefiting people's livelihood, as well as the unity of financial transformation to a new model and support for the transformation of real estate to a new model.
Zhang Bo, president of 58 Anju Real Estate Research Institute, believes that the meeting mentioned "improving the main supervision system and capital supervision of real estate enterprises", which shows that the regulator pays more attention to the financial pressure on the real estate development side. At the same time, the meeting also mentioned that "to meet the reasonable financing needs of real estate enterprises of different ownership without discrimination", indicating that the financial pressure of private real estate enterprises is expected to be eased, at least the phenomenon of "borrowing new to repay the old" is likely to increase.
After the latest statement of the Central Financial Work Conference, on November 3, according to media reports, the relevant person in charge of the bond department of the China Securities Regulatory Commission said that in the next step, the China Securities Regulatory Commission will thoroughly implement the decisions and arrangements of the Party Central Committee and the State Council to stimulate the vitality of the bond market. Adhere to the bottom-line thinking, and make every effort to do a good job in risk prevention and control in key areas such as real estate and urban investment. This is the first time that the China Securities Regulatory Commission has put forward the term "explosion-proof thunder". Therefore, industry insiders expect that in the next step, the China Securities Regulatory Commission will take the "explosion-proof thunder" of open market bonds and non-standard debts as the top priority.
Liu Shui, director of enterprise research at the China Index Research Institute, believes that since the beginning of this year, the financing amount of real estate enterprises has continued to decline. In the next few months, it is difficult for market sales to change significantly, and the industry is not expected to improve significantly. Although the recent high-level emphasis on "treating everyone equally" to support the reasonable financing of real estate enterprises, there are many difficulties in the effective implementation in the short term, so the financing of real estate enterprises will remain weak.
"On the whole, the risk of real estate enterprises is still spreading, and to prevent and resolve the risk of real estate enterprises, it is necessary to have a 'two-pronged approach' at both ends of supply and demand. On the one hand, it is necessary to increase the support of financing policies for real estate enterprises and increase the implementation of the 'three arrows' policy, such as supporting the normalization of credit enhancement and bond issuance, and speeding up the approval of equity financing. On the other hand, it is necessary to increase the adjustment and relaxation of demand-side policies, promote the stabilization and recovery of real estate sales, and improve the expectations of financial institutions for the real estate industry, so that their willingness to invest will increase. Liu Shui added.
Keyword 6
Commercial housing encourages "high quality and high price"
At present, the confidence of the real estate industry is still fragile, and the industry's expectations have not improved.
Industry insiders believe that there is still room for policy relaxation and support. To this end, the gradual optimization of the price limit policy, so that high-quality improvement projects can resume market pricing, and drive the stabilization of housing prices in core cities has also become the focus of attention.
On September 26, Chengdu optimized its real estate policy, which involved the adjustment of price limit measures. In terms of the reference price of second-hand housing, the Chengdu New Deal proposes that the reference price release mechanism for second-hand housing transactions will no longer be implemented. At the same time, the decoration price of finished residential buildings shall be determined by the enterprise independently according to market conditions (except for those agreed in the land transfer contract), and the management requirements such as model rooms, sales sites, and decoration lists shall be strictly implemented, and high-quality and high-price prices shall be encouraged. In addition, on October 23, among the 7 newly listed residential lands in Chengdu, the highest average sales price of finished house Qingshui was not set. This also means that Chengdu's "double limit" policy, which has been implemented for nearly three years, will no longer exist.
In this regard, a relevant person from the Chengdu Municipal Bureau of Planning and Natural Resources said that the batch of "double limit" policy was cancelled, and there was no restriction on housing prices and land prices. Under normal circumstances, the policy of no restriction on land price will also be continued.
On October 16, Suqian, Jiangsu Province issued the "Ten Housing Rules" to implement the management of "high quality and high price" for commercial housing, and the development enterprises can reasonably price according to the project and market changes, and effectively play the role of market regulation, so that buyers can enjoy real discounts. Suqian's optimization of the price limit policy means that price reductions are allowed to promote the recovery of trading volume, which will help return prices to the market and help enterprises recoup funds from sales.
It is reported that the mainland implements a record-filing system for the sales price of newly built commercial housing. Before applying for the pre-sale permit of new commercial residential buildings, the developer must go to the local price authority for price filing, and the price department will guide the declared price.
During the period of overheating of real estate, in order to curb the rise of housing prices, various localities issued "price limit orders" to limit the increase in housing prices to prevent the price of newly built commercial housing from rising sharply. As the property market enters a downward period, the filing system for new housing sales prices in various places has changed to "limit the fall". Since 2021, more than 20 cities, including Yueyang, Jiangyin, Shenyang, Tangshan, Kunming, Zhuzhou, and Zhangjiakou, have issued "fall restriction orders". Whether it is a "rise limit order" or a "fall limit order", its original intention is to maintain the stable and healthy development of the property market.
Liu Shui believes that the original intention of the introduction of the price limit policy is to achieve "stable land prices, stable housing prices, and stable expectations" when the market is hot, and support reasonable housing demand. However, with the change of the market environment, the negative impact of the price limit policy has become more and more prominent. The price inversion not only increases the difficulty of buying a house with real housing demand, but also fails to reflect the real situation of the market, which goes against the original intention of the policy. In the context of the increasing pressure on the real estate market adjustment, many cities have issued "fall restriction orders", which has also led to poor sales of real estate enterprises and hindered the return of funds. In the new market environment, it is expected that the price limit policy will also be optimized, including reasonably formulating the record price of new houses and the price limit standards of land auctions, and reserving floating space to make the selling price of the project closer to the real market price when it enters the market;
Source: Beijing News