Source: Securities Times
Author: Zhang Da

On May 17, following a video conference on how to effectively secure housing across the country in the morning, the Central Bank and the General Financial Supervisory Authority issued three “big red envelopes” in the afternoon, including reducing the down payment, lifting the lower interest rate limit, and lowering interest rates on provident fund loans.

In the afternoon, the State Council also held a policy routine briefing. Officials from the Ministry of Housing, Urban-Rural Development, the Ministry of Natural Resources, the People's Bank of China, and the State Administration of Financial Supervision presented the situation relating to effective implementation of supporting policies for housing delivery and answered questions from reporters.

First, let's take a look at the important information from the afternoon session:

Central Bank: Will set up 300 billion yuan of affordable housing reloans

Tao Ling, deputy governor of the People's Bank of China, said that recently, the Politburo meeting of the Central Committee proposed a coordinated study of policies and measures to absorb existing real estate and optimize incremental housing. This is a major decision and arrangement made by the central government taking into account new changes in the relationship between supply and demand in the real estate market and the people's new expectations for high-quality housing.

Tao Ling said that the central bank will set up 300 billion yuan of affordable housing reloans. Encourage and guide financial institutions in accordance with the principles of marketization and rule of law to support local state-owned enterprises to acquire unsold commercial housing at reasonable prices to be used as allotted or leased affordable housing, which is expected to drive 500 billion yuan in bank loans.

Specifically, Tao Ling said that the main points of this policy are as follows:

First, the scale of affordable housing reloans is 300 billion yuan, with an interest rate of 1.75%. The term is 1 year, and can be extended 4 times. The recipients include 21 national banks, including the China Development Bank, policy banks, state-owned commercial banks, postal savings banks, and joint stock commercial banks. Banks issue loans in accordance with the principles of independent decision-making and risk sharing. The People's Bank of China issues reloans based on 60% of the loan principal amount, which can drive bank loans of 500 billion yuan.

Second, the purchased commercial housing is strictly limited to commercial housing that has been built by real estate companies that have not been sold, and real estate companies with different forms of ownership are treated equally. According to the principle that affordable housing is used to meet the rigid housing needs of wage earners, the apartment type and area standards for purchased commercial housing are strictly grasped.

Third, the city government selected local state-owned enterprises as purchasers. Some enterprises and affiliated groups in the country must not be involved in hidden local government debts, must not be local government financing platforms, and should also have bank credit requirements and credit facilities, and be quickly placed or leased after acquisition.

Fourth, voluntary participation. The city government independently decides whether to participate based on factors such as local affordable housing needs and commercial housing inventory levels. Wage groups that meet the guarantee conditions independently choose whether to participate in the placement or lease. The real estate company negotiates with the acquirer on an equal footing and decides independently whether to sell. Twenty-one banks independently decide whether to issue loans to acquirers in accordance with the principles of risk sharing and commercial sustainability.

Tao Ling said that this policy is an important step introduced by the People's Bank of China to support the construction of a new model for real estate development, which is conducive to achieving multiple goals through market-based methods. The first is to speed up inventory removal from stock commercial housing. Local state-owned enterprises, with the support of banks, participate in market-based acquisitions of already built and unsold commercial housing, which can drive the commercial housing market to remove inventory. The second is to speed up the supply of affordable housing. Commercial housing after acquisition is used as allotment or rental affordable housing, which can better meet the housing needs of wage earners. The third is to help secure the handover of buildings and the “white list” mechanism. After the real estate company sells the commercial housing that has already been built, the return funds can be used to renew the project under construction and improve the financial situation of the housing enterprise.

Tao Ling also said that with regard to the above policy, the People's Bank of China will issue an official document in the near future, namely the “Notice on Matters Relating to the Establishment of Affordable Housing Reloans.”

Ministry of Housing and Construction: Will introduce a work plan to fight to secure the delivery of housing

Dong Jianguo, vice-minister of the Ministry of Housing and Urban-Rural Development, said that this morning, the State Council held a national video conference on how to effectively secure housing. Comrade He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, attended the conference and made a speech, making comprehensive arrangements and putting forward clear requirements for housing delivery work. In the near future, the Ministry of Housing, Urban-Rural Development, the Ministry of Natural Resources, the People's Bank of China, and the General Administration of Financial Supervision will issue relevant supporting policy documents.

Tung Jianguo said that the Ministry of Housing and Construction, together with the General Financial Supervisory Authority and other departments, will introduce an offensive work plan to secure housing delivery for urban commercial housing projects. Specific measures include:

The first is to figure out the bottom numbers. The city government should comprehensively investigate the commercial housing projects currently under construction in the city, carry out a major clean-up, lock down projects that are difficult to deliver, accurately grasp existing problems, and establish project accounts.

The second is classification and disposal. City governments should guide project development enterprises to formulate “one project, one policy” disposal plans in accordance with the principles of marketization and rule of law. Marketization means including eligible projects, or projects that can be improved through market-based measures, into a “white list” to provide financing support and promote project construction and delivery. Legalization of the rule of law is to push insolvent projects to enter judicial disposal procedures; bankruptcy; restructuring; restructuring. Safeguarding the legitimate rights and interests of buyers should be placed first in disposal. In this process, it is necessary to resolutely investigate and punish all kinds of illegal acts in accordance with the law, prevent violators from “falling out of their shell,” and do not let acts that harm the interests of the public get mixed up.

The third is judicial support. For projects requiring judicial disposition, local people's courts will promptly handle relevant cases to improve the efficiency of judicial disposition; carefully adopt property protection measures for offensive combat projects to support project construction and delivery.

Fourth, establish a long-term mechanism. On the one hand, sales of existing homes are vigorously and orderly promoted, and commercial housing projects are supported to meet existing housing sales conditions through a “white list” financing policy; on the other hand, those that continue to carry out pre-sales are strictly supervised to prevent the emergence of new risks.

Tung Jianguo said that in order to implement the plan well, the national, provincial and municipal levels have drawn up competent forces, set up special work classes, implemented centralized offices, and promoted the work in an integrated manner. At the same time, establish an information system for housing insurance delivery projects to track the progress of supervision work in a timely and accurate manner. We will make concerted efforts, pay close attention to implementation, and concentrate our strength and time to fight an offensive battle to secure the delivery of housing.

Ministry of Natural Resources: Proposed measures to properly dispose of vacant land

Vice Minister of Natural Resources Liu Guohong said that the Ministry of Natural Resources earnestly implements the decisions and arrangements of the Party Central Committee and the State Council, and is preparing to introduce policies and measures to properly dispose of vacant land and revitalize existing land in accordance with the requirements of good housing security work, to support local governments to start from reality and properly dispose of vacant residential land that has already been sold through take-over and acquisitions as appropriate to help enterprises solve problems. At the same time, promote the conservation and intensive use of land, prevent and mitigate risks, and help high-quality real estate development.

Regarding policy highlights, Liu Guohong said that the first is to support enterprises to optimize development. The main thing is to eliminate barriers to development and construction, reasonably exempt from liability for breach of contract due to natural disasters and epidemics, and allow enterprises to rationally adjust planning conditions and design requirements in accordance with procedures to better meet market needs.

The second is to promote market circulation and transfer. It mainly plays the role of a secondary market for land, supports pre-registered transfers and “secured transfers”, and encourages transfers or cooperative development.

The third is to support local authorities to take back land at a reasonable price. It mainly supports local authorities to take back vacant land at reasonable prices in accordance with the “order as needed” principle for affordable housing construction. Local authorities are allowed to adopt a “take-back and supply” parallel method to simplify procedures, handle planning and land supply procedures, and better provide facilitation services.

Furthermore, in order to implement the main responsibilities of city and county governments and strengthen overall coordination, cities and counties are required to establish coordination and decision-making mechanisms to dispose of idle and revitalize existing land, improve decision-making procedures, improve administrative efficiency, and maintain the bottom line of policies.

Liu Guohong also said that there are also a number of support measures.

The first is to increase financial support. Establish a sustainable financial guarantee mechanism. Local government special bonds, etc. can be provided with financial support for land taken over or purchased for affordable housing projects.

The second is to provide tax support. Those who buy commercial housing that have already been built, as well as take back or acquire existing land for affordable housing construction, can enjoy preferential tax policies for affordable housing in accordance with existing regulations after confirmation by the municipal or county people's governments.

The third is to simplify the work process. Where commercial housing has already been built or stock of land is taken back or purchased for affordable housing, the city and county governments agree to allocate the land at the time of approval and carry out parallel processing of “take-back - supply”. The nature of the right to use the land may be changed and registered as land transfer according to the approval documents.

At the same time, the policy also clarifies the requirements for local authorities. The recovery and acquisition of land should be carried out within their means, taking into account the balance of project income and expenditure in an integrated manner, so as not to increase the risk of hidden government debt.

General Financial Supervisory Authority: Plans to improve the coordination mechanism for urban real estate financing

Regarding the much-publicized urban real estate financing coordination mechanism, Xiao Yuanqi, deputy director of the State Administration of Financial Supervision, said that after the “Notice on Establishing an Urban Real Estate Financing Coordination Mechanism” was jointly issued with the Ministry of Housing, Urban-Rural Development in January of this year, the “Notice on Further Exploiting the Role of Urban Real Estate Financing Coordination Mechanisms to Meet the Reasonable Financing Needs of Real Estate Projects” to establish and improve the coordination mechanism for urban real estate financing, continue to adhere to city-specific policies, with the city as the main body and project as the center, to fully support the financing and completion delivery of projects subject to renewal. Buyers' legal rights.

Xiao Yuanqi also said that whitelist projects of housing enterprises with different ownership systems are treated equally, and that under the premise of controlling risk, financing support can be provided by adding new loans, extending stock loans, and issuing mergers and acquisitions loans. The loan amount must match the project construction cycle, cover the completion and delivery of the project, and the funds must be delivered on the “white list” project to ensure delivery of the house. Separate accounts are set up and accounted for for “white list” projects, closed operation and management of project funds, and misappropriation of project funds is strictly prohibited. Banks should strictly review the use and flow of credit funds.

Editor/jayden