On June 12, the People's Bank of China held a meeting to promote the work of affordable housing refinancing in Jinan, Shandong Province. The meeting pointed out that the establishment of affordable housing refinancing, encouraging and guiding financial institutions to support local state-owned enterprises to purchase the existing stock of commercial housing at a reasonable price for the allocation or lease of affordable housing in accordance with the principles of marketization and rule of law, is the financial sector's implementation of the CPC Central Committee Political Bureau's plan to comprehensively digest the stock of real estate and optimize the incremental housing The important measures to promote the construction of a new model of real estate development are conducive to accelerating the de stocking of commercial housing stocks through marketization, increasing the supply of affordable housing, and helping guarantee the delivery of housing and the "white list" mechanism.
The nationwide video conference on housing guarantee and delivery held on May 17 (hereinafter referred to as "the video conference on housing guarantee and delivery") proposed that in cities with a large inventory of commercial housing, the government could purchase some commercial housing at reasonable prices as affordable housing.
At present, the purchase of stock commercial housing for affordable housing has become one of the measures to digest and revitalize stock real estate. All regions are actively exploring the "purchase for construction" model of affordable housing, and coordinating the de stocking policy and supply of affordable housing.
"Purchase instead of construction"
Play multiple roles
Before the video conference on housing guarantee and delivery, Nanjing, Zhengzhou, Chongqing, Dali and other cities have launched the exploration of adopting the "purchase instead of construction" mode to revitalize the stock of housing.
After the video conference on guaranteed housing was held, many places actively followed up and supported the purchase of some commercial houses as affordable housing. According to incomplete statistics by the reporter of Securities Daily, after May 17, at least 7 cities, including Liuzhou, Suzhou and Kunming, have made it clear that they will purchase some commercial houses as affordable housing in the form of state-owned enterprises.
For example, the Notice on Further Optimizing Policies and Measures to Promote the Steady and Healthy Development of the Real Estate Market issued by Liuzhou Housing and Urban Rural Development Bureau on June 9 mentioned that the government should promote the de stocking of commercial housing, and organize qualified municipal state-owned enterprises to purchase a part of vacant commercial housing as affordable housing at reasonable prices.
On June 6, Huainan City, Anhui Province issued a public notice on soliciting opinions from the public on the Notice on Further Adjusting and Optimizing Real Estate Policies (Draft for Comments), which mentioned that it was necessary to explore pilot state-owned enterprises to purchase vacant commercial housing for affordable housing, and promote financial institutions to actively use affordable housing refinancing funds to support.
Chen Wenjing, director of market research of China Index Research Institute, said in an interview with the Securities Daily that the acquisition of some commercial houses as affordable housing can play multiple roles. First, it is conducive to accelerating the supply of affordable housing; Second, it is conducive to the reduction of market inventory; Third, this round of collection and storage will be targeted at commercial houses that have been completed but not sold. After the real estate enterprises sell the completed commercial houses, the recovered funds can be used to support the projects under construction and help ensure the delivery of houses.
Li Yujia, the chief researcher of Guangdong Housing Policy Research Center, told the Securities Daily that raising affordable housing by purchasing stock can not only shorten the preparation cycle, but also better adapt to the current supply and demand relationship in the real estate market.
"Order on demand"
Do a good job of raising funds
Affordable housing includes affordable rental housing (hereinafter referred to as "guaranteed housing"), affordable housing for rationing and other types. According to the report of the China Index Research Institute, according to the planning of the Ministry of Housing and Urban Rural Development, during the "14th Five Year Plan" period, 8.7 million sets (rooms) of guaranteed rent housing were planned to be raised nationwide, and 5.73 million sets (rooms) had been raised by the end of 2023. For the guaranteed rent housing only, there will still be 2.97 million units (rooms) remaining from 2024 to 2025, which is a large scale.
"Considering that there is still a gap in the target of guaranteed rent housing this year and next, if the stock property is converted into guaranteed rent housing in the future, it can not only speed up the raising progress of guaranteed rent housing, but also effectively digest the market inventory." Chen Wenjing said, however, compared with the raising mode of incorporating market-oriented long-term rental apartments into the guaranteed rent housing system, More incremental capital support is needed for state-owned enterprises to convert stock properties into guaranteed rent houses.
In terms of financial support, Tao Ling, vice governor of the People's Bank of China, said at the regular policy briefing of the State Council on May 17 that the Central Bank had set up 300 billion yuan of affordable housing refinancing, encouraged and guided financial institutions to support local state-owned enterprises to purchase completed but unsold commercial housing at reasonable prices, and use it as affordable housing for allotment or rent, in accordance with the principles of marketization and rule of law, It is expected to drive bank loans of 500 billion yuan.
Tao Ling also mentioned that the People's Bank of China will issue official documents in the near future, and consider the policy convergence as a whole, and incorporate the rental housing loan support plan into the low-income housing refinancing policy for management, which will be comprehensively promoted nationwide.
The loan support plan for rental housing will be established in February 2023, and pilot projects will be carried out in eight cities, including Chongqing, Zhengzhou and Tianjin, to support market-oriented batch purchase of existing housing and expand the supply of rental housing. The report on the implementation of China's monetary policy in the first quarter of 2024 shows that by the end of March 2024, the balance of the rental housing loan support plan is 2 billion yuan.
"Demand based purchase" is a key word in the process of raising affordable housing. Dong Jianguo, Vice Minister of the Ministry of Housing and Urban Rural Development, stressed at the briefing that the city government insists on "ordering according to needs" and can organize local state-owned enterprises to purchase part of the stock of commercial housing at reasonable prices as affordable housing.
The meeting for promoting the work of affordable housing refinancing held by the Central Bank also emphasized that when promoting the implementation of affordable housing refinancing policies, financial institutions and relevant units should "strengthen system guarantee and internal and external supervision, adhere to voluntary participation, purchase according to needs, and reasonable pricing".
In this regard, Li Yujia said that in the future, when local governments purchase stock commercial housing as affordable housing, they should first determine how many affordable housing they need, as well as the type, size and location of affordable housing, and purchase housing resources in the stock market as needed.
Chen Wenjing suggested that pilot projects could be launched in Guangzhou and core second tier cities. As far as guaranteed rent housing is concerned, the demand for rental housing in these cities is relatively strong, the stock properties acquired can be fully utilized, and the improvement of the core city market will also have a positive effect on the whole country.
"The government's purchase of stock commercial housing and other models have just begun. In the future, with the large-scale promotion of cities, it is expected to play an obvious positive role in destocking and stabilizing the market, which will be conducive to accelerating the stabilization and recovery of the real estate market." Chen Wenjing said.
