As far as the eye can see, Hai'an is a residence. Photo by Southern Weekly reporter Zhou Xiaoling
Hai'an is a county-level city in the south-central part of Jiangsu Province. Standing on the street of its main city, you can see residential areas as far as the eye can see. The construction industry is the pillar industry of Hai'an, and it is also known as the "hometown of construction". Recently, the Haian people who built houses have attracted the attention of the whole country because they have run through the "old for new" mode of housing.
On April 2, 2024, 15 families in Hai'an got the "house tickets" issued by the Housing and Urban-Rural Development Bureau, becoming the people who eat crabs in the property market. The "house ticket" is issued by the government, and it is proof that the old house is used to offset the down payment on the new house.
At present, more than 50 cities across the country have launched the "old for new" policy for new houses, but there is a lot of shouting, and there is not much really to promote, Haian has really facilitated the transaction, becoming one of the first cities to announce the transaction in the major housing "trade-in" cities. At present, 15 sets have been sold, 6 sets are going through procedures, and 26 sets have entered the negotiation stage.
For this reason, throughout April, Ding Yunfeng continued to receive interview requests from various media. He is 43 years old and the head of the Housing Security and Real Estate Supervision Section of the Hai'an Municipal Bureau of Housing and Urban-Rural Development.
Haian is managed by Nantong City. In 2023, Jiangsu's GDP will rank second in the country, and Nantong will be one of the five trillion cities in the province. The per capita GDP of Hai'an City is 165,000 yuan, which has entered the threshold of developed countries in the world and ranks second in Nantong.
At the beginning of 2024, the Hai'an Municipal Government issued the "Operation Caliber of the "Trade-in" Policy for State-owned Enterprises (Including Equity Participation) Housing", which appeared in the sales offices of participating real estate in the form of roll-up banners, and planned to implement 100 units. At present, Haian's "trade-in" has entered the second round, attracting a total of 500 groups of people to sign up.
Throughout the country, at the end of 2023, the mention of "trade-in" for houses began to appear, which was first a sales method promoted by housing brokerage companies, and then some developers began to "exchange for new purchases" activities, and then developed into a model led by industry associations and participated by various entities, and in 2024, more and more governments began to introduce policies, and state-owned enterprises also participated.
According to incomplete statistics from Southern Weekly, since 2023, more than 50 cities across the country have promoted housing "trade-in", and in April 2024 alone, 15 cities have launched the policy.
Combing through the policies of these more than 50 cities, some are no different from the traditional "selling the old and buying the new", and the effect is limited; Some rely on government subsidies or state-owned enterprises to take over, and local finances are under pressure. The Haian plan allows the recyclers of old houses and the replacement of new houses to take what they need, and the government only acts as waiters.
Align with improvement needs
Haian's "trade-in" was first a demand from developers to the Housing and Urban-Rural Development Bureau.
At the end of 2023, several developers reported to Ding Yunfeng that they had a group of customers with clear improvement needs, but due to the limitations of the old houses on hand and the uncertain property market, the plan to buy a new house was repeatedly shelved.
"The prototype (of the policy) was proposed by Mr. Yin." At nine o'clock in the morning on a weekday, Ding Yunfeng waited at the sales office of Hyde Garden, and after introducing the Southern Weekend reporter to Yin Yong, assistant to the chairman of Zhongjie Real Estate, he hurried back to the unit to clock in and go to work. Including Hyde Garden, Jiangsu Zhongjie Real Estate Group Co., Ltd. (hereinafter referred to as "Zhongjie Real Estate") has four real estate projects participating in the "trade-in".
In the first round, a total of nine real estate projects participated in the "trade-in" from five developers, of which more than half were private enterprises.
Haide Garden is only one kilometer away from the Housing and Urban-Rural Development Bureau, it is a luxury housing project located in the core urban area, with an average household area of more than 200 square meters, and a total house price of more than 6 million.
Yin Yong has also seen the "trade-in" in other places before, and mostly adopts the method of "housing agency sales", but in fact, it is only the opportunity to get the intermediary agency to give priority to recommending the property. When the market is in a downturn, those who buy houses are waiting and seeing, those who sell houses are reluctant to make deals at low prices, and the way of intermediary sales is of little significance to customers.
As a native of Hai'an, Yin Yong is familiar with the local situation, and many families in Hai'an urban area have more than two houses, and when the property loses liquidity, these people will inevitably panic. Customers who want to improve their housing will also choose to wait and see for a while.
In his view, the effect of "trade-in" is that people can exchange the rapidly depreciating old assets in their hands for more competitive new assets, which can improve the quality of life while resisting the downside risk of the property market.
Developers' needs quickly entered the policy discussion session.
After receiving the task from the bureau, Ding Yunfeng and his colleagues in the department began to investigate cities that have implemented "trade-in", such as Zibo and Taicang. The two cities, one in the north and one in the south, are completely different in the formulation of the policy of "exchanging the old for the new", and now they have become the two common modes of "exchanging the old for the new" in China.
The essence of the "Zibo model" is still "selling the old and buying the new", allowing customers to postpone the down payment during the free sale of the old house, and the deposit can be refunded if the old house cannot be sold within the specified date. The "Taicang model" is for state-owned enterprises to purchase second-hand houses at appraisal prices.
There are many applicants and the transaction volume is small, which is a similar dilemma of "trade-in" in many places. When consulting Taicang, Ding Yunfeng asked about the reasons for the limited effect of the policy, one is that some areas stipulate the replacement ratio of the total price of old houses and new houses, such as the price of old houses shall not exceed 60% or 80% of the new houses, the second is that parking spaces cannot be replaced together, and the third is that the houses of immediate family members cannot be used for replacement.
Based on the improvement of experience in other places, the "Haian Model" has been released. The operation plan was quickly supported by the city leaders, and Ding Yunfeng convened local developers with the plan, and those who were willing to participate could modify individual terms according to their own circumstances and submit them for approval before release.
It is not an intermediary to help sell, nor is it a state-owned acquisition, a major feature of the Haian model is that the developer of the new house acquires the owner's old house, and the government is responsible for the service and facilitates the transaction.
Whether to participate in the "trade-in" or not, the developer's account will inevitably be calculated very clearly.
Yin Yong said that for the new house in hand, if it is sold at a significant discount, it can be sold in the short term, but it will damage customer confidence, affect the reputation of the enterprise, and is not conducive to long-term operation; If the "old is traded", the developer only bears the risk of depreciation of part of the old house, but gets more room for decentralization. The price of an old house is usually no more than half of that of a new house, and if an old house of 50 million yuan is collected, it can drive more than 100 million yuan in new house sales.
In the face of old houses, developers have more disposal methods than individuals, such as renovation and sale, bank mortgage financing, work-to-housing, rental operation, government acquisition, etc. When evaluating the price of old houses, developers and owners need to negotiate on a one-room basis, and choose in both directions.
Participate in the "trade-in" Hyde Garden, one floor of one household, three sides of the balcony landscape. Photo by Southern Weekly reporter Zhou Xiaoling
Hai'an has designated an old house within the scope of participating housing "trade-in". Photo by Southern Weekly reporter Zhou Xiaoling
"Bringing buyers and sellers back to market"
It is not limited to the maximum proportion of the appraisal price of the old house to the total price of the new house, which is one of the "patches" of the Haian model on the basis of various places.
Ding Yunfeng explained that once the artificial proportion will cause a kind of "loss" psychology to the people, the proportion will naturally be reflected in the process of bargaining between the two parties, the principle is voluntary trading, "let the buyer and seller return to the market".
In the preliminary research, Ding Yunfeng found that the "trade-in" in most cities adopts the third-party appraisal price as the price benchmark, but the result is that both sides do not buy it, the buyer feels overvalued, and the seller feels undervalued, so there are few dealers.
The adoption of a third-party appraisal price is related to the acquisition of old houses by state-owned enterprises. Compared with private enterprises, state-owned enterprises will face decision-making risks and integrity risks when bargaining with the public, and the use of third-party appraisal prices can avoid these risks.
Free trading also requires a reference price as a yardstick for negotiations. The Housing and Urban-Rural Development Bureau has given a reference index, that is, the guide price of second-hand housing tax, which is the benchmark price or price fluctuation range for tax payment in second-hand housing transactions determined by the government according to local conditions.
The two parties negotiate around this price, according to the specific situation, which is more efficient. If the two parties cannot negotiate the price many times, the owner of the old house can also return to the second-hand housing market to buy and sell freely.
"It can be understood as a 'bottom-up' choice." A salesman from Jinshi Boya Park told Southern Weekend that "trade-in" buyers can be regarded as definitive buyers in the second-hand housing market, as long as the house is within the scope demarcated by the government, they can sign up. Jinshi Boya Park is also one of the first round of Hai'an "trade-in" real estate, located in the city center, surrounded by complete supporting facilities, double school district housing.
He has served a "trade-in" customer, the old house is located in the Zhongyang Waterscape Park 1.4 kilometers away from the project, with an area of 150 square meters, a discount of more than 1 million yuan, in exchange for a new house of more than 2 million yuan, although the distance is not far, but the old house is very old, there is no elevator.
A Hyde Garden salesman told Southern Weekend that among his customers, the fastest replacement only takes one week, and under normal circumstances, the decision-making cycle for old house owners to participate in the replacement is about three months. In this "trade-in", there are no restrictions on the type of new houses in each building, and the houses for sale in the participating real estate can be replaced.
According to the data provided by the Hai'an Housing and Urban-Rural Development Bureau, as of April 26, more than 400 groups had signed up for the "old for new" activity, and after the second round of housing "trade-in" opened, more than 100 groups of registrations were attracted, and the sincerity of this round of owners was significantly higher than that of the first round.
Bridge with a room ticket
After the buyer and seller agree on the price, it stands to reason that the developer needs to pay the old house owner the price of the old house, and the owner will transfer the house to the company.
But in this process, both sides have concerns: the developer is worried that after paying the money, the owner will give up buying the new house at a negotiated price, and the gain will outweigh the loss; The owner is also worried that after the transfer, if the new house is handed over "far away", it will lose a lot.
How to dispel the concerns of both parties, the answer found by the Housing and Urban-Rural Development Bureau is "house ticket". This tool in the process of demolition and relocation is borrowed as a transaction voucher between the buyer and seller of the "old for the new", which is stamped and effective by the government department, which is "equivalent to the free love between the two parties, and the relationship is determined by the government's seal".
Ding Yunfeng introduced that the specific process of using the house ticket is that after the developer signs the old house transfer agreement with the owner of the old house, the developer will use the old house funds as a deposit into the special account for the house ticket, and the bank will issue the house ticket, and the government department will seal and confirm, and the house ticket will be given to the customer.
The customer uses the house ticket to the sales department to buy a house, the house ticket replaces the down payment flow, and the other purchase money is made up through self-raised or mortgage loans and provident fund loans, and the bank handles mortgage or provident fund loans for customers normally. After receiving the house ticket, the developer can go to the government to redeem the same amount.
"It's equivalent to me being just an Alipay, an intermediate account, to ensure the security of the transaction between the two parties," he described.
Originally, banks had to have a down payment flow for loans, but now recognising the house ticket is also a breakthrough. The Bank of Jiangsu has issued a "house ticket" in a local demolition project, and the Housing and Urban-Rural Development Bureau selected it to pilot the "trade-in". "As long as one bank breaks through, the other banks will admit it."
"The 'trade-in' room ticket system is Haian's innovation." Yin Yong said.
In addition to Hai'an, Zhongjie Real Estate also has residential projects in other cities. Yin Yong, who has dealt with housing and urban-rural development departments in other places, commented that although the team of Hai'an Housing and Urban-Rural Development Bureau is young but performs well, "it is not how smart they are, but they are more pragmatic and rush to solve problems." When there is a problem, they can basically come over and coordinate within a day or two. ”
"Flat management and simple handling of complex matters are the characteristics of the Haian government." Ding Yunfeng said that many things do not have to be approved by official documents, and sometimes a phone call can bring together various departments and quickly coordinate and deal with them.
In the implementation of the "old for the new", SOEs have given a lot of consideration to bargaining, and the decision-making cycle is too long, making it difficult to implement. In order to better avoid the decision-making risk and integrity risk in the process, Haian decides on important matters for collective decision-making and collective responsibility, and after the state-owned enterprises bargain, each set of housing materials is reported, and the competent department will negotiate and sign, and then report to the main person in charge of the city.
The rejuvenation of the cadre contingent has, to a certain extent, weakened the sense of hierarchy among government organs.
Tan Zhen, the 40-year-old party secretary of Hai'an, is the youngest county-level party secretary in Jiangsu and has a lot of economic thinking, which Ding Yunfeng described as "sometimes unable to keep up with him".
Xu Xu, director of the Hai'an Municipal Bureau of Housing and Urban-Rural Development, is 46 years old. Ding Yunfeng commented that this is the most down-to-earth and most learned director he has ever contacted. Ding Yunfeng observed that Xu Xu's handbag contained several pounds of information, and there were several such bags in the office. After understanding, I learned that it was because the housing and construction department was in charge of many lines and materials, so it could only put a schoolbag in one department, and the meeting of which department would bring which bag.
Hai'an Housing and Urban-Rural Development Bureau is located in Hai'an Construction Building, the façade is outdated, and there is no curfew downstairs, so the public can enter and exit. Ding Yunfeng's office is a large studio, and the workstations of department members are distributed along the wall. At the entrance is a wooden coffee table and two-seater sofa chair, with an open space in between. Once colleagues report to work or citizens come to report problems, the vacant land is crowded.
"Every day when you open the door, it's like a vegetable market." In this office, Ding Yunfeng has seen all kinds of grievances in the world, and he has seen lonely old people crying for tens of thousands of yuan in the same day, and he has also seen millions of middle-aged men who are struggling with tiredness in their eyes.
"Definitely not a bailout"
At present, Yin Yong's only worry is that the old houses he received do not have effective demand support.
The means used by developers to dispose of old houses are nothing more than mortgage financing; lease, sale; Or it is used for the construction of talent housing and affordable housing.
Haian plans to implement "trade-in" housing units only 100 units this year. Ding Yunfeng said that this is precisely taking into account the follow-up pressure of developers, and the number of "trade-in" units will be adjusted according to market conditions in the later stage.
The government has also prepared a "reassurance" for developers. For houses that cannot be handled, developers can choose to have the government operate them on their behalf, rent them out, or sell them to local state-owned assets at a discounted price. "We're not there yet." Ding Yunfeng said.
He has conducted research on the housing needs of affordable housing, talent housing and newly hired civil servants in the city, and only some government units have reported more than 50 sets of housing for high-level talents. "High-end talent housing, we are in short supply."
In 2023, Haian will introduce 188 science and technology innovation projects, add 3 national standardization pilot projects, and 1 national science and technology business incubator.
"There is a large inflow of industrial population, and the old houses in good locations have strong rental demand." Ding Yunfeng told Southern Weekend that Hai'an's most attractive point for high-end talents from other places is educational resources, and accompanying families are the main force of Hai'an's housing demand.
There are more than 20 students admitted to Tsinghua University and Peking University every year, and students who are admitted to Nanjing University can get together a class. Ding Yunfeng's daughter is in the sixth grade this year, and half of the children in her class are from nearby cities.
Compared with talent housing, Haian's low-end affordable housing has been in excess of demand for a long time. Most companies will build their own apartments and factories instead of government affordable housing.
Haian's 2023 government work report disclosed that 74.8% of the registered population over 35 years old and the young and middle-aged population accounted for only 25.1%. The age structure of the population is large, the foreign population is limited, and the demand for affordable housing is not high.
Ding Yunfeng said that the task of building affordable housing by local governments is heavier, but Hai'an has submitted for approval to build more affordable housing, and the city has stopped the construction of resettlement housing and affordable housing, and adjusted the scale of affordable housing through the government's stock assets. For example, the old houses in the "old for new" have many mature supporting facilities and good locations, which are very popular with groups in need.
Despite the successful implementation of the "old for new", Ding Yunfeng still emphasized, "'Trade-in' is only an effective means to activate the property market at this stage, and it has opened up a way to release the demand for improved housing, but it is definitely not a straw or a quick-acting relief pill." ”
While more and more cities are riveting to launch the local version of "trade-in", how to do a good job in follow-up services, whether to follow up the introduction of financial products, and how to operate efficiently of state-owned asset disposal companies are all new topics.
Southern Weekly reporter Zhou Xiaoling
Editor-in-charge: Zhang Yue