On July 30, the Political Bureau of the Central Committee of the Communist Party of China (CPC) held a meeting to analyze and research the current economic situation and deploy economic work for the second half of the year. The meeting also laid an important tone for the future direction of the real estate market. The meeting emphasized the active support for the acquisition of existing commodity housing for use as indemnificatory apartments, which was the first time such content was mentioned in the statements of the Central Political Bureau meetings in the past; it is expected that the scope of inventory acquisition and management in various regions will gradually expand and the landing speed will be accelerated.
China Securities News (CSN) - The Political Bureau of the Central Committee of the Communist Party of China (CPC) held a meeting on July 30 to analyze and research the current economic situation and deploy economic work for the second half of the year. The meeting also laid an important tone for the future direction of the real estate market.
The meeting emphasized that risks in key areas should be continuously prevented and resolved. It is necessary to implement new policies that promote the stable and healthy development of the real estate market, adhere to the combination of inventory digestion and incremental optimization, actively support the acquisition of existing commodity housing for use as indemnificatory apartments, further improve the work of guaranteeing and delivering apartments, and accelerate the construction of a new mode of real estate development. It is necessary to improve and implement local comprehensive debt schemes and create conditions to accelerate the resolution of local government financing platform debt risks.
Wang Xiaohuang, chief analyst of Zhuge Data Research Center, analyzed and believed that the real estate market would end in a decline in the first half of 2024, and in the long term, the Political Bureau meetings usually point out the policy direction of the real estate market. Therefore, the content of the meeting is very important and will lay the foundation for the policy direction in the future.
"From the content of this CPC Political Bureau meeting, it is consistent with the basic tone of real estate regulation in the two sessions of this year and the latest Third Plenum. It emphasizes paying attention to real estate risk prevention and control, and focuses on measures such as digesting inventory and implementing inventory acquisition and management to ensure the stable development of the real estate market." said Zhang Bo, Director of 58 Anjuke Research Institute.
"Looking at the focus of work mentioned in the meeting, the second half of the year will focus on the digestion of inventory and incremental optimization. This will be an important task throughout the second half of this year, and it has important enlightening significance for stimulating the second-hand housing market, revitalizing unfinished projects, existing land, commercial and office projects." said Yan Yuejin, Research Director of E-house Research Institute.
"The meeting emphasized the active support for the acquisition of existing commodity housing for use as indemnificatory apartments, which was the first time such content was mentioned in the statements of the Central Political Bureau meetings in the past; it is expected that the scope of inventory acquisition and management in various regions will gradually expand and the landing speed will be accelerated." said Wang Xiaohuang.
Furthermore, it said that the implementation of inventory acquisition and management is still mainly concentrated in small and medium-sized cities, such as Lin'an in Hangzhou, Dali, Changzhou, Kunming, Huaian, and so on. Its positive role in the overall market is not obvious, and large cities need to take the lead to play a demonstrative role.
"Using the acquisition of existing properties for sale as indemnificatory apartments can not only reduce inventory but also improve the financial chain of real estate enterprises, thus realizing the main responsibility of real estate enterprises in guaranteeing delivery. It can also prevent risk expansion and raise funds for indemnificatory apartments. In the second half of the year, it is expected that the acquisition of existing properties will be fully implemented, but the actual scale to be leveraged and the effect of inventory reduction remain to be seen." said Li Yujia, Chief Researcher of the Housing Policy Research Center of Guangdong Provincial Planning and Design Institute.
At the same time, the meeting also called for further improvement in guarantee delivery work and accelerated the construction of a new mode of real estate development.
In fact, guaranteeing delivery is one of the key points in preventing risks in the real estate market. With a series of policy supports, the effect of delivering apartments is obvious, and the completion growth rate of the real estate market is higher than the new construction growth rate.
"In the future, guaranteeing delivery work will continue, and a new mode of real estate development will be constructed by stabilizing people's livelihood, abandoning high turnover and high leverage operation modes, so as to promote the high-quality development of the real estate market." said Wang Xiaohuang.
Analysts believe that as the intensive stimulus effect of May and June policies begins to weaken, policies will continue to exert force in the second half of the year.
"Judging from the area of new construction of real estate projects, the scale of development investment, sales amount, and funds in place in January-June, although the decline has eased, the market recovery is not obvious. Since the second half of July, the support effect of policies announced in May and June has begun to weaken, and new and second-hand housing sales in key cities have declined month-on-month." said Li Yujia.
Therefore, in addition to risk prevention, new models and increments should also be explored in the second half of the year to hedge the industry downturn.
"It is expected that real estate policies will maintain a relatively loose feature. Interest rate cuts may also occur in the second half of the year, pushing down mortgage interest rates. In addition, the provident fund policy may be comprehensively adjusted, such as lowering the down payment ratio for second-unit provident fund loans to 20% and for first-unit provident fund loans to 15%, as well as lowering the provident fund interest rate." said Li Yujia.
It is worth noting that this Political Bureau meeting mentioned the issue of 'involution' for the first time. The meeting emphasized the need to strengthen industry self-discipline and prevent vicious competition of 'involution'.
Yanjue believes that this has an important enlightenment for the relevant industries, including real estate. In the internal circulation phenomenon of the real estate field, the recent mortgage rebate event has attracted widespread attention in the market. The bank pays rebate fees to obtain loan customers, which not only increases the cost of loans and adds unnecessary links, but also interferes with market order.
"The issue of internal circulation was raised at this meeting, and I believe that the high-level officials have made a clear decision to determine that industry self-discipline needs to be strengthened. From this perspective, including development, intermediary, leasing, evaluation, loans, mortgages and other fields should sort out such internal circulation phenomena, regulate industry operations and order, and ensure orderly progress in the new round of development." Yan Yuejin added.