"Trade-in", a common concept in the consumer goods sector, is gradually being implemented in the real estate market.
Recently, Hai'an City, Jiangsu Province has introduced a trial implementation of the "old for new" policy for commercial housing, and plans to implement 100 sets of "old for new" commercial housing this year, which has attracted market attention. Statistics from relevant institutions show that since last year, more than 30 cities across the country have expressed their support for the "old for new" commercial housing.
How to exchange the "old for the new" commercial housing? Can it effectively meet the demand for improved housing? What is the impact of the implementation of the new policy on the real estate market?
Focus on the replacement group and launch a new deal
On April 2, in Hai'an City, Jiangsu Province, the centralized distribution ceremony of the first batch of "trade-in" room tickets for local commercial housing was officially held. For the first batch of owners participating in the "trade-in" policy, the housing replacement funds will be issued and exchanged in the form of "house tickets", and the owners can purchase a new local house in a targeted manner, and complete the "buy one and sell one" at one time.
The "trade-in" of commercial housing is an important measure to promote the virtuous cycle of new and second-hand houses and release the demand for housing purchases. Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, told this reporter that it is difficult to decentralize new houses recently, which is to a certain extent related to the poor circulation of "buy one and sell one" to improve sexual demand. "The second-hand houses in the hands of the housing replacement group cannot be sold, resulting in insufficient funds to achieve 'buy one'. The state has repeatedly emphasized the need to promote a virtuous cycle of real estate, and when it is difficult to achieve the self-circulation of the market, various localities have begun to dredge the channels for changing houses and launch the housing 'old for new' policy. Li Yujia said.
Nationwide, since 2023, more than 30 cities have expressed their support for "trade-in". Cities such as Yancheng, Suzhou, and Shenyang have issued subsidies for buying houses with "old for new"; some cities such as Ningbo and Jinan have launched "trade-in" services with developers and real estate brokerage institutions; and in Xiangcheng District, Suzhou, Zhengzhou, Lianyungang and other places, state-owned enterprises or developers directly purchase old houses, and the sales proceeds of the owners will be used to purchase new houses in the corresponding real estate projects.
Recently, many places have refined policies to further help residents "sell the old and buy the new". On April 2, a real estate company in Wuxi issued an announcement on the "trade-in" of commercial housing, proposing that it will try to repurchase the second-hand commercial housing stock within the scope of Liangxi District, Wuxi City, and residents can purchase new commercial housing in the projects under the holding of the real estate company, and the first batch of "trade-in" quota is 200.
"Judging from the current situation, there are two main ways to support 'trade-in' in various places. Chen Wenjing, director of market research at the China Index Research Institute, told this reporter that the first is that the real estate enterprises and joint brokerage agencies give priority to the sale of old houses, and if the old houses are sold within a certain period of time, they will buy new houses according to the process; In addition, local governments will provide partial housing subsidies to individuals or families who sell their own houses and purchase newly built commercial housing, which is also an important measure for local governments to further promote the "trade-in" of home buyers.
Support to increase the enthusiasm of mobilization
Judging from the timeline, since last year, some cities have successively proposed to support the "trade-in" of commercial housing. The implementation of "trade-in" in Jiangsu Haian is similar to the policy operation in the past two years. So why is this practice making a splash again in the near future?
"Recently, many places have clarified the details of the 'trade-in' policy, indicating that the 'trade-in' operation is becoming a mainstream policy tool in many places, and has gradually changed from a spontaneous pilot in the past to a policy with systematic planning and wide coverage. Especially in the third- and fourth-tier cities and counties represented by Hai'an, similar policies are gradually sinking, which will play a better role in promoting property market transactions. Yan Yuejin, research director of the E-House Research Institute, said.
Judging from the practice of Haian, Haian plans to promote 100 sets of "trade-in" projects. According to local disclosures, the number of applicants has exceeded 400 groups. At present, 15 houses have been sold, and 23 units are being inspected and evaluated. "It shows that this approach is recognized by the market and has a good 'digestion ability'. At present, the policy has entered the practical level, which is really good for all kinds of second-hand housing transactions, and then effectively promotes the release of improving demand. Yan Yuejin said.
Li Yujia told reporters that for developers or state-owned assets platforms to directly acquire, the people who exchange houses select the intended new houses and sign a letter of intent with the real estate companies to purchase the new houses. Then, the professional appraisal agency evaluates the second-hand housing and issues relevant reports, and the real estate company negotiates the acquisition with the replacement group. If the negotiation is successful, the funds from the sale of second-hand houses will be transferred to the third-party supervision fund account, and the funds will be used to purchase the newly built commercial housing of the designated project, and the funds will be a closed-loop operation.
"There is also a model where the government provides support such as tax breaks. After the replacement of the home buying group and the real estate enterprise sign the letter of intent to purchase the new house, the real estate enterprise, the real estate agency, and the real estate information platform give priority to intensively push the second-hand housing sales information, if the transaction is successful, the new house down payment payment, mortgage loans, etc., if the transaction is unsuccessful, the new house intention contract will naturally become invalid. Li Yujia said.
From the perspective of the overall replacement chain of "old for new", it is difficult to sell the old house smoothly. At present, the real estate market is in a state of oversupply, and the difficulty of "selling one" restricts the promotion of "buying one", which is the main reason why the "trade-in" of commercial housing has been launched last year but has not aroused an obvious market reaction. Since the beginning of this year, the "old for new" policy has achieved positive results in some cities, which is the result of individual cities increasing support and introducing more real estate enterprises to intervene.
"Whether it is giving priority to the sale of second-hand houses of 'trade-in' participants, or the direct acquisition of old houses by real estate companies, it is more conducive to the release of improved demand. The former helps to improve the efficiency of customers' house exchanges, and because the 'old for new' usually specifies the scope of new homes that can be purchased, if the second-hand housing is successfully sold, it can promote the corresponding new housing projects to be decentralized. For the old housing acquisition model, the old houses acquired by local state-owned assets platforms or developers are generally used for affordable housing, talent housing and other purposes, and some enterprises have transformed old houses into homestays, youth apartments, etc. for leasing, which has promoted the effective circulation of recovered old houses. The local housing exchange subsidy, coupled with the national level 'buy one sell one' refund of individual income tax, has reduced the cost of housing for residents to a certain extent, and is also conducive to further promoting the release of improving demand. Chen Wenjing said.
Build a platform to make "sell one buy one" smoother
Observing the logic behind the "trade-in" policy of commercial housing, one end is to promote the transfer of second-hand housing and smooth the circulation channels of old housing, and the other end is to promote the decentralization of commercial housing and help real estate enterprises digest the inventory of new housing. "Sell one buy one" can not only meet the demand for improved housing, but also alleviate the inventory pressure of real estate enterprises to a certain extent, and then rejuvenate the real estate market.
However, from the practical point of view, there are still some difficulties in the "trade-in" of commercial housing.
Mr. Yang, who works in Beijing, has always wanted to give his parents a new house in his hometown in Jiangsu. He said that changing a house is different from changing consumer goods such as household appliances, and there are many factors to consider, in addition to seeing whether the price of the old house is suitable and how much the subsidy is, but also looking at the location, room type, environment, transportation, supporting facilities, living habits, etc.
In Li Yujia's view, the local government instructs some enterprises to purchase second-hand houses, usually when there are many existing houses and the supply of housing exceeds demand. Compared with the new affordable housing, it is more convenient to directly purchase the housing with good location facilities. However, due to factors such as financial strength, management costs, and the preservation and appreciation of state-owned assets, the scope of implementation of "local enterprises instructing enterprises to acquire old houses" may be limited.
"At present, the 'old for new' policy has achieved certain results in some cities, but it is still in the exploration stage. From the perspective of the two models of 'trade-in', the priority sales model is facing the pressure of adjustment of the second-hand housing market, and the number of second-hand housing listings in many cities is still at a high level. In the old house acquisition model, the location, price, supporting resources and other factors of the new house are mostly in line with the buyers, so as to achieve the purpose of 'exchanging the old for the new'. Chen Wenjing said that on the whole, the housing "old for new" initiative is indeed conducive to smooth the flow of new and old housing and enrich the source of affordable housing. In the long run, it is also necessary to combine monetary policies such as interest rate cuts and RRR cuts, so that a number of measures can work together to promote the "old for new" commercial housing to maximize the effect.
From the perspective of the market situation, the current domestic property market mainly meets the demand for rigid and improved housing. Taking into account factors such as residents' income and employment, the recently introduced new policies such as the abolition of the lower limit of the mortgage interest rate for the first home can not only effectively meet the needs of the group to "have a house to live", but also promote the improvement of the demand group to "live in a good house". The introduction of measures such as interest rate reduction and cost reduction will also effectively ensure that new citizens and young people take root in the city, and then drive the steady progress of new urbanization.
"To promote the 'trade-in' policy to be operable on a larger scale, we can actively play the role of the government, so that local governments can connect buyers and sellers, and create a platform with strong credibility and transparency. Developers, second-hand housing owners, housing agents, housing appraisal agencies, financial institutions, etc. can use the platform to know the real listings, real customers, and real prices, so as to better match supply and demand and reduce transaction costs. At the same time, it is supplemented by support such as taxation and preferential purchase prices to promote the transaction between buyers and sellers. Li Yujia said. (Reporter Liao Ruiling)
Source: People's Daily Overseas Edition