On May 17, a national video conference was held in Beijing to continue to adhere to city-specific policies, fight the tough battle of risk disposal of unfinished commercial housing, and solidly promote key tasks such as ensuring delivery of housing and digesting the stock of commercial housing. The Ministry of Housing and Urban-Rural Development, the Ministry of Self-financing, the Central Bank and the Financial Authority gave a detailed explanation of the "supporting policies for ensuring the delivery of housing". In addition to the continued easing of credit policies, there are strong support measures to support the government's acquisition and storage, revitalization of land stock, financing coordination mechanism, and guarantee the delivery of buildings, mainly in the following five aspects.
01
With the reduction of the down payment ratio, the abolition of the lower limit of interest rates, and the reduction of provident fund interest rates, the current mortgage policy has been looser than in 2016
On May 17, the People's Bank of China, the State Administration of Financial Regulatory Commission and other departments issued a notice to adjust the real estate credit policy, mainly involving the following three aspects:
First, the down payment ratio will be lowered by 5 percentage points to 15% for the first set and 25% for the second set. At the end of August 2023, the central bank lowered the minimum down payment ratio for the first and second homes in the country to 20% and 30% respectively. Since then, except for 8 cities such as Beijing and Shanghai, other cities have adjusted the down payment ratio to the lower limit stipulated by the state. This time, the central bank will reduce the down payment ratio by another 5 percentage points, aiming to further reduce the pressure of down payment on home purchases and lower the threshold for home purchases.
Second, the lower limit of the interest rate of the first and second sets of commercial loans will be abolished to reduce the pressure on residents to repay mortgages. Since the establishment of the dynamic adjustment mechanism for the first home loan interest rate policy in 2022, as of the end of March this year, 75 of the 343 cities (prefecture level and above) across the country have lowered the lower limit of the first home loan interest rate, and 64 have cancelled the lower limit, and the number of cities that have canceled the lower limit of the mortgage interest rate has increased by 38 compared with the end of December last year. However, it should be noted that it is up to local governments to decide whether the lower limit of mortgage interest rates at the city level will be abolished.
Third, the interest rate on provident fund loans will be lowered by 0.25 percentage points. The interest rate of the first housing provident fund loan is 2.35% for less than 5 years and 2.85% for more than 5 years, and the interest rate for the second set of provident fund is 2.775% for less than 5 years and 3.325% for more than 5 years.
It can be said that the deregulated mortgage policy has been more relaxed than in 2016. From September 2014 to February 2016, the central bank relaxed the real estate credit policy four times, and on September 30, 2014, the second home loan was implemented to subscribe to the loan but not to recognize the house, and the first home loan has been settled and then the second house was purchased, and the first home loan policy was implemented; The minimum down payment for the first home is 30%, and the minimum loan interest rate is 0.7 times the benchmark interest rate. On March 30, 2015, the down payment ratio for the second home was reduced, and the minimum down payment ratio was adjusted to not less than 40% for the purchase of the second house before the first home loan was settled. On September 30, 2015, the minimum down payment ratio for the first home in the city with no restrictions on purchase was adjusted to no less than 25%. On February 1, 2016, the minimum down payment ratio for the first house in cities with no restrictions on purchase is 25% in principle, and it can be lowered by 5 percentage points in various places; If the first home loan is not paid off and the second house is purchased, the down payment ratio will be adjusted to no less than 30%.
02
The 300 billion yuan re-loan will support the government's collection and storage, and help cities and regions with high inventory to alleviate the pressure of depletion
On May 17, a video conference was held on the work of ensuring the delivery of housing across the country. He Lifeng, Vice Premier of the State Council, stressed that in cities with a large inventory of commercial housing, the government can purchase some commercial housing at a reasonable price as appropriate.
On the afternoon of the same day, at the regular policy briefing of the State Council, the relevant person in charge of the central bank said that it would set up a 300 billion yuan affordable housing re-loan with an interest rate of 1.75%, a term of 1 year, and a period of 4 extensions, including 21 national banks such as China Development Bank and Postal Savings Bank. The People's Bank of China (PBoC) will issue re-loans at 60% of the loan principal, which can drive bank loans of 500 billion yuan to support local state-owned enterprises to purchase completed and unsold commercial housing at a reasonable price for use as affordable housing for sale or rent. In accordance with the principle that affordable housing is used to meet the rigid housing needs of wage and salary income groups, the house type and area standards of the purchased commercial housing should be strictly grasped. When the city government selects a local state-owned enterprise as the acquisition entity, the state-owned enterprise and its affiliated group shall not be involved in the hidden debts of the local government, shall not be a local government financing platform, and shall have bank credit requirements and credit space, and shall be placed or leased quickly after the acquisition. In addition, the Rental Housing Loan Support Program will be integrated into the affordable housing refinancing policy and will be fully rolled out nationwide.
This policy is an important measure introduced by the central bank to support the construction of a new model of real estate development, which is conducive to achieving multiple goals through a market-oriented approach. The first is to speed up the destocking of existing commercial housing. Local state-owned enterprises, with the support of banks, participate in the acquisition of completed and unsold commercial housing in a market-oriented manner, which can promote the destocking of the commercial housing market. The second is to speed up the supply of affordable housing. The acquired commercial housing is used as affordable housing for sale or rent, which can better meet the housing needs of wage and salary groups. The third is to help ensure the delivery of buildings and the "white list" mechanism. After the real estate enterprise sells the completed commercial housing, the returned funds can be used to continue the construction of the project under construction and improve the financial situation of the real estate enterprise.
Since 2022, 13 cities including Jinan, Suzhou, Fuzhou, and Tianjin have landed. Just recently, Zhengzhou announced that it will acquire 5,000 second-hand houses through Zhengzhou Urban Development Group, and Lin'an District of Hangzhou City also issued an announcement on the purchase and storage of stock housing, which has aroused widespread concern in the market, and the district government has decided to acquire 10,000 square meters of housing for public rental housing. Most of these cities and regions have high housing inventory and are facing greater pressure to decentralize.
In the past, the government's model of purchasing and storing commercial housing has always faced two core problems: first, where does the funds come from? Local finance, rental housing loan support plan, and self-raised funds of urban investment platforms are the three major sources of funds, but the scale is limited after all, and the central bank has set up a 300 billion yuan affordable housing reloan, which will become a new source of supplement. However, it should be pointed out that the scale of 100 billion yuan is still not enough to implement government collection and storage on a large scale across the country, and it is estimated that the funds needed to achieve this goal may exceed 5 trillion yuan; Second, how do the benefits cover the costs? Taking rent as an example, the rental return rate in most cities is only about 2%, and even if low-cost funds such as refinancing are used, it is not easy to balance income and expenditure by taking into account operating costs. If the above two problems cannot be solved, the large-scale acquisition and storage of commercial housing will only transfer the inventory risk from the real estate enterprise side to the government side, and will not be substantially resolved.
Therefore, we believe that the government storage model will not be rolled out on a large scale, and it is likely that it will only be implemented in cities and regions with high inventory and large affordable housing gaps, and the effect of destocking will naturally be difficult to achieve the monetization of shantytown reform in the year. According to CRIC statistics, among the key cities in the country, there are 66 cities with a digestion cycle of more than 18 months for commercial housing, and 24 cities with a digestion cycle of more than 36 months.
03
The financing "white list" should be fully advanced and loaned, and 297 cities have been established and approved with loans of 935 billion yuan
At the regular policy briefing of the State Council, the responsible comrades of relevant departments said that they would further play the role of the coordination mechanism for urban real estate financing to meet the reasonable financing needs of real estate projects. The city government promotes the projects that meet the conditions of the "white list" to "make every effort to advance", and commercial banks "lend as much as possible" to the projects that comply with the "white list" to meet the reasonable financing needs of projects under construction. There are mainly the following measures:
First, commercial banks have set up special working groups, led by bank leaders, and the corresponding departments as members to form a joint work force.
Second, participate in the review and check to be included in the "white list" project.
Third, optimize the loan approval and disbursement process, appropriately delegate approval authority, speed up lending, and manage project access, rating, credit granting, post-loan and other aspects can be managed separately, and separate credit lines are allowed. At the same time, it is also necessary to formulate specific rules for due diligence and exemption, and exempt grassroots banks and relevant employees from liability if they have performed their duties diligently in accordance with the requirements, as well as those who have incurred risks in loans due to force majeure factors.
Fourth, we should make sure that all loans are due. The "white list" projects of real estate enterprises with different ownership systems are treated equally. On the premise of controlling risks, financing support can be provided in a variety of ways, such as new loans, extension of existing loans, and issuance of M&A loans. The loan amount should match the construction cycle of the project, cover the funding gap for the completion and delivery of the project, promote the completion and delivery of the project, and effectively protect the legitimate rights and interests of buyers.
Fifth, the "white list" projects should be accounted for separately, operated and managed in a closed manner, and the funds between the projects should not be mixed, and the project funds should not be diverted for other purposes, so as to ensure that the funds are used to ensure delivery. Commercial banks strictly examine the use and flow of credit funds, and agree with the borrower to open a project fund supervision account with the lending bank to ensure that project capital, loan issuance, payment and disbursement, and loan repayment are handled through the project fund supervision account. The pre-sale fund supervision account of the "white list" project should be opened with the host bank.
As of May 16, 297 cities at and above the prefecture level across the country have established a real estate financing coordination mechanism, and commercial banks have approved the "white list" project loan amount of 935 billion yuan according to the internal approval process.
04
The Ministry of Natural Resources intends to support local governments in recovering idle land from three aspects: funds, taxes and fees, and allocation processes
The Ministry of Natural Resources said that there are two main lines for the disposal and revitalization of stock land: one line is to strictly dispose of idle land in accordance with the law, and the other line is to increase support for the revitalization and utilization of stock land.
First, support enterprises to optimize development. The main purpose is to eliminate obstacles to development and construction, reasonably exempt from liability for breach of contract caused by natural disasters and epidemics, and allow enterprises to reasonably adjust planning conditions and design requirements in accordance with procedures to better meet market demand.
Second, promote market circulation and transfer. It is mainly to give full play to the role of the secondary market of land, support the transfer of advance registration and "transfer with mortgage", and encourage transfer or cooperative development.
Third, support local governments to resume land at a reasonable price. The main purpose is to support local governments to recover idle land at a reasonable price in accordance with the principle of "purchasing according to demand" for the construction of affordable housing.
The supporting policies include three aspects:
1. Increase financial support. Establish a sustainable financial guarantee mechanism, and provide financial support through local government special bonds for the recovered or acquired land used for affordable housing projects.
2. Provide tax support. For the acquisition of commercial housing that has been completed, as well as the recovery and acquisition of stock land for the construction of affordable housing, after confirmation by the municipal and county people's governments, they can enjoy preferential tax policies for affordable housing in accordance with the existing regulations.
3. Simplify the workflow. For the acquisition of completed commercial housing or the resumption or acquisition of stock land for affordable housing, the municipal and county governments shall agree to allocate land together when approving the repossession, and implement the parallel handling of "repossession-supply", and the nature of land use rights can be changed and registered as allocated land according to the approval documents.
05 Comprehensive investigation, classified disposal, and judicial support, and do a good job in ensuring the delivery of housing
Do a good job in the tough battle of ensuring the delivery of commercial housing projects, and prevent the risk of unfinished disposal. In accordance with the principles of marketization and rule of law, classify and dispose of commercial housing projects under construction that have been sold but not delivered, promote the construction and delivery of projects, and effectively protect the legitimate rights and interests of home buyers. The work plan focuses on three aspects of requirements:
First, it is necessary to take the protection of the legitimate rights and interests of home buyers as the fundamental starting point and end point, and adhere to the principles of marketization and rule of law. Take multiple measures at the same time, classify and dispose of them, and promote the delivery of projects on time and with good quality. For those who are still unable to hand over the house after exhausting all means, they must go through judicial channels.
Second, it is necessary to make full use of the urban real estate financing coordination mechanism to support the financing and construction delivery of real estate projects under construction.
Third, it is necessary to consolidate the responsibilities of local governments, real estate enterprises, and financial institutions. First, local governments should assume territorial responsibilities and promote the coordination and cooperation of departments and courts such as housing and construction, financial management, public security, natural resources, and auditing, so as to perform their duties and form a joint force. Second, real estate enterprises should assume the main responsibility, formulate a "one project, one policy" disposal plan, actively dispose of assets, raise funds from multiple parties, and ensure that the project is delivered on time and with good quality. Third, financial institutions should implement the provisions on due diligence and exemption from liability, so as to "fully lend" eligible projects, speed up loan approval and issuance, and support project construction and delivery.
The work plan of the battle to ensure the delivery of housing:
The first is to find out the bottom number. The city government should comprehensively investigate the city's commercial housing projects under construction and sold, carry out a large-scale doxxing, lock the projects that are difficult to deliver, accurately grasp the existing problems, and establish a project ledger.
The second is classified disposal. In accordance with the principles of marketization and rule of law, the city government should guide the project development enterprise to formulate a disposal plan of "one project and one policy". Marketization is to include eligible projects, or projects that can take market-oriented measures to improve conditions, into the "white list" to provide financing support and promote project construction delivery. The rule of law is to promote the insolvent project to enter the judicial disposal procedure, the bankruptcy of the bankruptcy, and the reorganization of the reorganization. In the disposal, it is necessary to put the protection of the legitimate rights and interests of the buyers in the first place. In this process, it is necessary to resolutely investigate and deal with all kinds of violations of laws and regulations in accordance with the law, and not allow those who violate laws and regulations to "break out of their shells" and not allow acts that harm the interests of the masses to get through in the dark.
The third is judicial support. For projects that require judicial disposition, the local people's courts will accept the relevant cases in a timely manner to improve the efficiency of judicial disposition; Prudently take property preservation measures for tough projects to support project construction and delivery.
Fourth, establish a long-term mechanism. On the one hand, we will vigorously and orderly promote the sales of existing houses, and support commercial housing projects to meet the sales conditions of existing houses through the "white list" financing policy; On the other hand, for those who continue to implement pre-sale, the pre-sale funds of the project shall be strictly supervised to prevent the emergence of new risks.
Source: CRIC Research Center
Authors: Yang Kewei, Li Shiyun
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