Finance Association, Feb. 1 (Reporter Wang Haichun) The new year has just begun, and the renovation of urban villages across the country has begun to be implemented at an accelerated pace.

According to the WeChat account “Chengdu Housing and Construction” on January 31, two policy banks, the China Development Bank and the Agricultural Development Bank of China, have signed a total of 29 urban village renovation projects with Chengdu. Up to now, they have invested about 1.5 billion yuan, all of which have been disbursed to the project demand side. This marks the first batch of special loans successfully invested in the Chengdu Urban Village Renovation Project.

The above signed projects are only part of the arrangements relating to the renovation of urban villages in Chengdu. According to reports, the first batch of 62 urban village renovation projects in Chengdu received special loan support from the state, with a total capital of over 120 billion yuan, ranking among similar cities in the country.

According to reports, the special loan funds will be earmarked for preliminary urban village renovation work such as levying compensation, resettlement, construction of housing settlements, etc., as well as construction of supporting infrastructure related to the community.

When the special loan for urban village renovation in Chengdu was launched, new news also came from cities such as Guangzhou and Xi'an.

According to information released by the Guangzhou Municipal Bureau of Housing and Urban-Rural Development on January 30, 14 urban village renovation projects, including Tan Village in Luochongwei District of Baiyun District of Guangzhou City and Dali Village in the Minke Park Area, received the first batch of 142.6 billion yuan in special loans for urban village renovation from the China Development Bank and the Agricultural Development Bank, with an initial disbursement of 1.5 billion yuan. Among them, the Luochongwei area urban village renovation project received the first national special loan of 100 million yuan from the China Development Bank.

On the same day, the country's first batch of special loans for urban village renovation also successfully landed in Xi'an a few days ago.

The Xi'an Municipal Housing and Construction Bureau revealed on January 30 that two urban village renovation projects in the Xi'an High-tech Zone and Chanba Ecological Zone received the first batch of 500 million yuan of special loans for urban village renovation in the country from the Shaanxi Branch of the China Development Bank.

The Xi'an Municipal Housing and Construction Bureau said that in the future, it will actively seek more support to actively and steadily advance urban village renovation work by playing a policy-oriented role such as special loans. While improving urban functions and transforming development models, it will boost economic growth and promote urban development.

In addition to the cities mentioned above, many places have also made arrangements for the transformation of urban villages. Fujian revealed at the 2024 Provincial Housing, Urban-Rural Construction Work Conference that Fujian plans to launch 233,800 old residential renovation projects this year; the province plans to invest 46.7 billion yuan in the future to promote urban village renovation projects in Xiamen and Fuzhou.

Furthermore, places such as Nanning, Hefei, Zhejiang, and Liaoning have all announced the first round of urban village renovation plans, and generally plan to complete the renovation in 3-5 years. According to currently published data, Nanning plans to renovate 22 urban villages over the next 5 years, involving 44,000 households, with a total investment of nearly 250 billion yuan; Hefei plans to complete 104 urban village renovation projects within 3 years.

Regarding the successive implementation of special loans for urban villages, Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, said that special loans are an important financial instrument innovation to promote urban village renovation, accelerate urban village renovation, implement the public nature of urban village renovation, and ensure that planning goals can be achieved.

“The main purpose of this type of loan is to resolve the large upfront capital investment and the capital recovery cycle is too long, resulting in a mismatch in the flow of funds; making effective allocation in terms of terms of time is conducive to boosting the enthusiasm of state-owned enterprises, urban investors, and related entities, and reducing the cost of urban village renovation.” Li Yujia said.

It further pointed out that the special loan still needs to be repaid. The main source of funding for debt repayment is the cost of land sold with the plan after the land expropriation is completed, as well as subsequent commercial housing sales, and the operating income of affordable housing properties, etc., to finally achieve a balance between capital input and output, thus promoting the next project and achieving sustainability and recyclability.

Judging from the amount of special loans currently announced in various regions for urban village renovation, Chengdu and Guangzhou alone have reached 262.6 billion yuan. According to news statistics, 11 cities, including Jinan, Qingdao, Hefei, Shijiazhuang, and Shenyang, have granted a total credit amount of about 320 billion yuan in special loans for urban village renovation.

Also, according to CCTV news, on January 30, the China Development Bank issued a special loan of 9.08 billion yuan for urban village renovation, involving nearly 100 projects in more than 10 cities, including Guangzhou, Nanjing, Wuhan, Chengdu, Zhengzhou, and Jinan, to build 238,400 housing units.

Industry insiders believe that the amount of loans currently announced for urban village renovation is quite impressive, and in the long run, the benefits brought about by urban village renovation are even more worth looking forward to.

Recently, there were media reports that cities included in urban village renovation and guaranteed housing construction will expand. According to estimates based on relevant indicators, the number of cities included in urban village renovation is expected to expand from 35 to 52.

According to estimates by Huang Yu, executive vice director of the Central Intelligence Agency, urban village renovation in the next 5 years will drive an investment scale of about 1 billion square meters, which will effectively support the real estate market. On average, each year, the new demand for housing will be about 44 million square meters, accounting for 18% of the sales area of newly built commercial residential homes in 22 cities in 2022.

The Central Research Institute predicts that urban village renovation will also play a substantial role in driving investment, including land purchases and construction and security investments, at a scale of about 10 trillion yuan.

Industry insiders believe that promoting urban village transformation has certain positive significance for urban construction, housing improvement, and boosting the economy.

“Promoting the renovation of urban villages is an act of optimizing housing resources. To a certain extent, it can ease the contradictions of unbalanced and inadequate urban development and improve the appearance of urban villages. Furthermore, the transformation of urban villages will have certain benefits for promoting consumption and boosting social investment. It can improve the current situation where residents are willing to save and weak to spend, and is conducive to promoting the smooth operation of the market economy.” According to an analyst looking for housing in Zhuge.