Strong deployment of compact responsibilities, new direction of the Politburo meeting

There is only one word difference from "guaranteed delivery of buildings" to "guaranteed delivery of houses", but more attention is paid to protecting the legitimate rights and interests of buyers.

Li Yujia, deputy director and chief researcher of the Guangdong Provincial Housing Policy Research Center

On April 30, the meeting of the Political Bureau of the Central Committee of the Communist Party of China proposed to continue to adhere to the city-specific policies, consolidate the responsibilities of local governments, real estate enterprises and financial institutions, and do a good job in ensuring the delivery of housing to protect the legitimate rights and interests of buyers. It is necessary to combine the new changes in the supply and demand relationship of the real estate market and the new expectations of the people for high-quality housing, coordinate the study of policies and measures to digest the stock of real estate and optimize the incremental housing, and pay close attention to building a new model of real estate development to promote the high-quality development of real estate.

The first and foremost emphasis of the meeting was to continue to adhere to city-specific policies. This is reflected in the recent policies to bail out real estate in Nanjing, Chengdu, Changsha and other places. Recently, Chengdu has introduced a new policy to lift the housing purchase restriction policy. Some media believe that the price index of new houses in Chengdu is still rising year-on-year, and the lifting of the purchase restriction policy means that the local government has a strong stimulus and a strong dependence on real estate. However, from the perspective of second-hand housing, which is more representative of the market trend, the second-hand housing price index in Chengdu fell for 9 consecutive months month-on-month and fell for 3 consecutive months year-on-year.

Moreover, the decline in the price index of second-hand housing in Chengdu has expanded significantly, and it is more important to pay attention to the fact that the number of second-hand housing listings in Chengdu has exceeded 200,000 units, which is a phenomenon that appeared in the case of hot second-hand housing sales last year, and less than 80,000 units within 10 years of building age, which means that the demand for improvement is more prominent. Therefore, Chengdu withdrew from the purchase restriction, started the "old for the new", and expanded to new office and industrial buildings, and also partially turned to "old for new", the purpose is also to accelerate the cycle of new and second-hand houses, digest the number of listings, and stabilize expectations.

The meeting emphasized the need to "consolidate the responsibilities of local governments, real estate enterprises, and financial institutions". On the basis of the original territorial responsibility of local governments and the main responsibility of developers, the responsibility of financial institutions is proposed for the first time. To put it simply, financial institutions cannot be reluctant to lend or refuse to lend based on concerns about the overall risk of real estate, ignoring the compliance of individual projects and being whitelisted. In the past, during the upswing of the property market, financial institutions were excessively and blindly superstitious about the rise in housing prices, and gave excessive leverage support, or even increased leverage in violation of regulations. During the downturn in the property market, excessive leverage reduction is also a reason for the ups and downs of the industry and the market.

Consolidate the responsibilities of all parties in financial institutions. On the one hand, between the financial regulatory authorities and commercial banks, it is necessary to strengthen the implementation mechanism for reasonable financing support for compliant real estate projects, that is, as long as the property rights of the collateral are clear, the sales plan is reasonable, and the pre-sale funds are effectively supervised, normal development loan support should be given. On the other hand, the head office, branches and sub-branches of commercial banks should innovate the institutional mechanisms for credit extension and risk control management and review and approval, and shift from excessive emphasis on real estate collateral to project compliance review and cash flow management.

The meeting emphasized that "do a good job in ensuring the delivery of housing and protect the legitimate rights and interests of buyers". There is only one word difference from "guaranteed delivery of buildings" to "guaranteed delivery of houses", but more attention is paid to protecting the legitimate rights and interests of buyers. In the new era of greater emphasis on the high quality of the industry and the supply of quality housing, the work of ensuring delivery cannot be promoted solely on the basis of completing quantitative delivery tasks that are broken down to local governments. Guaranteeing the delivery of housing not only means that the house should be in a livable state in accordance with the project design requirements, but also to ensure the handling of property rights certificates and supporting facilities of the house.

Generally speaking, whether it is to prevent risks or protect people's livelihood, it is necessary to consolidate the responsibilities of all parties and stimulate the motivation of all parties. Only when the responsibilities of all parties are in place and the motivation is stimulated, can the elements of real estate "people, real estate, land and money" achieve a virtuous circle, and can we truly prevent risks and truly implement the guarantee of delivery. The meeting also proposed that it is necessary to combine the new expectations of the people for high-quality housing, coordinate the study of policies and measures to digest the stock of real estate and optimize the incremental housing, and pay close attention to building a new model of real estate development to promote the high-quality development of real estate.

The people's new expectations for high-quality housing are mentioned, and the importance of "good houses" has been raised to a new level. This is not only starting from the residents' demands for a better living in the new era, but also promoting the supply-side reform to match the demand, so that the demand can lead the supply, so as to achieve a balance between supply and demand. Judging from the sales of commercial housing in the first quarter, whether it is new housing or second-hand housing, all those that can achieve smooth sales are all high-quality housing, either of good quality, good supporting facilities, or job-housing balance.

On the contrary, some second-hand or new houses with long building age, shortage of supporting facilities or unworthy of the name, unreasonable house type, and the expectation of "difficult delivery" have long listing time, low removal rate, or must reduce the price before they can be sold. Therefore, whether it is the revitalization of the stock of housing, such as the recent implementation of "trade-in" in many cities, or the construction and sales of new housing, we must put the rigid demand and improvement demand for high-quality housing and "good house" requirements in the first place, and cannot just start from destocking.

The meeting emphasized "stepping up the construction of a new model of real estate development and promoting the high-quality development of real estate", which is also the top-level design for the sustainable development of real estate in the future. If we still adhere to the model of high-priced commercial housing, it is difficult to match the needs of new citizens, young people, wage earners, talent groups, etc., and the mismatch between supply and demand is also the main reason for the continuous decline of real estate in recent years. To create a new real estate development model, on the one hand, it is to promote the supply-side reform, that is, to build large-scale allocation of affordable housing, increase the preparation of affordable rental housing, and build a low-cost, rent-purchase combination and complete housing security system around the above-mentioned groups.

The ultimate goal of the reform of the housing system is to build a supply system of "market + security" and matching supply and demand. The meeting also proposed "overall study of policy measures to digest the stock of real estate and optimize the incremental housing". Under the new situation in which the relationship between supply and demand has undergone major changes, it is necessary to properly handle the relationship between stock and increment. On the one hand, there are enough houses in stock, and it is inevitable that part of the demand will turn to stock. On the other hand, there are deficiencies in the supply of housing stock in terms of quality, supporting facilities, design, etc., and the increment can make up for this shortcoming.

This is the virtuous circle between rigid demand and improved demand, new and second-hand housing. Judging from the data of the first quarter, the second-hand housing market dominated by small and medium-sized houses and low prices has become an important choice for rigid demand. On the other hand, the placement of affordable housing for the working class and talent groups needs to be raised on a large scale, and some studies believe that it can be solved by digesting the stock of real estate. However, in this process, there may be a moral hazard of "helping developers get out of the way", which will cause dissatisfaction among the masses, which needs to be paid attention to and scientifically resolved.

The author believes that solving the demand for affordable housing by digesting the stock of real estate can become a channel, of course, it can be solved from the stock of second-hand housing, and can also be explored from the new housing for sale or development, but the key is to follow the principles of marketization, legalization and commercial sustainability. For projects with a low enough appraisal price, whether they are operated as rental housing or sold as placement affordable housing, they can achieve a balance of funds, or even a profitable project, and can actively explore feasible models.

The author believes that the implementation of the "overall study and digestion of stock real estate and optimization of incremental housing policy measures" can combine the raising of placement affordable housing with the destocking of second-hand housing. It is suggested that the central government should issue special bonds and special funds, and then borrow or invest in central and local state-owned enterprises, acquire existing second-hand properties, and then place them at a lower price to "just need" and affordable housing purchasers, so as to achieve a closed loop of funds. On the one hand, this is conducive to stabilizing prices by increasing the circulation rate, and the number of second-hand housing listings will decline when the price is stabilized, and there will be no blind and panic listings. On the one hand, if the price system is stabilized, it will be able to stabilize new housing transactions, new construction starts and land supply.

The author believes that cities or regions with large scale and long de-stocking period (land that has been supplied but not developed + started and not sold + on sale) should suspend land supply. On the other hand, comprehensively promote the "trade-in" of second-hand housing. For developers, it is necessary to take out the "good housing" with good quality and high cost performance, and not to take the "old for new" as an opportunity to destock and end the goods. It is necessary for the "new" buyers to really see that the new house they want to buy is a good house that can improve their living conditions.