Source: Broker China

The Housing and Urban-Rural Development Bureau of Lin'an District of Hangzhou recently issued a notice to purchase a batch of commercial housing for public rental housing within Lin'an District following a study and decision by the Lin'an District People's Government. The listing requirement is within Lin'an District of Hangzhou. Analysts believe that the policy signals are very significant and provide very strong confidence in local inventory removal. It is expected that other cities may follow suit in the future.

Earlier yesterday, a piece of news went viral in the market saying, “China is considering the government buying houses that have not yet been sold.” Stimulated by this favorable news, the A-share real estate sector bucked the trend. By the end of the day,$Everbright Jiabao (600622.SH)$,$Tande Co.,Ltd. (600665.SH)$,$Yunnan Metropolitan Real Estate Development (600239.SH)$Wait for individual stocks to rise or stop.

It is worth noting that recent positive news about the property market has been very intense. According to some market sources, Nanjing took the lead in lowering interest rates for first home loans. According to media reports, banks in Nanjing are already preparing to adjust the execution interest rate for the first home loan to 3.45%; there have also been major changes in the mortgage interest rate in Hangzhou. If there are two existing homes in Hangzhou that meet the “first set of standards,” the mortgage interest rate can be converted to the first home interest rate; and Shenzhen has launched a free “secured transfer” fund supervision service for second-hand housing.

Major official announcement

The Housing and Urban-Rural Development Bureau of Lin'an District of Hangzhou issued a notice recently. Following a study and decision by the Lin'an District People's Government, a number of commercial housing units will be purchased for use as public rental housing within Lin'an District. The listing requirement is within Lin'an District of Hangzhou.

The announcement made it clear that the basic housing conditions are as follows: ① The entire building is used as the basic acquisition unit, and the construction area of a single unit is not more than 70 square meters; ② The purchased property must be equipped with a certain proportion of parking spaces, and the number of parking spaces to be sold in the property meets the ratio of 0.6 parking spaces, that is, each unit below 60 square meters (inclusive) is configured according to the ratio of 1.0 parking space.

The maximum price principle is that no more than the assessed price of surrounding properties and parking spaces is used as the maximum price for this acquisition, and finally implemented in accordance with the “Specific Implementation Plan for the Acquisition of Commercial Housing for Public Rental Housing” reviewed and approved by the district government.

Supplier qualification conditions are that the company has independent legal personality and can independently bear civil liability and contractual obligations. Have the necessary housing and service capabilities to fulfill the contract. There have been no illegal or untrustworthy acts in business activities in the past three years. It has a good business reputation and a sound financial accounting system.

The announcement also mentioned that in principle, the area of the purchased property shall not exceed 10,000 square meters. The final acquisition area shall be implemented in accordance with the “Specific Implementation Plan on the Acquisition of Commercial Housing for Public Rental Housing” reviewed and approved by the district government; the supplier shall not sell the provided housing again after registration; after registration, the purchaser entrusts a third party to carry out due diligence, risk assessment and price assessment for the registered project, and the costs shall be borne by the purchaser.

In response to the newly released policy, Yan Yuejin, research director of the Yiju Research Institute, said that this policy is the first of its kind in the country. The operation of this type of acquisition is an implementation of the Politburo Central Committee meeting to “Coordinate Research on Policies and Measures to Digest Existing Properties and Optimize Incremental Housing”. It also shows that a new direction of elimination has been implemented for housing companies' inventory properties.

Since the April 30 high-level meeting proposed “coordinated research to absorb existing real estate”, the market has anticipated that “the government will collect stored real estate to ease market pressure.”

Yan Yuejin said that the policy of Lin'an in Hangzhou can be understood that there are new actions surrounding inventory in various regions, and it is also a very important policy trend.

Yan Yuejin pointed out that there is a difference between this new policy and the recent implementation of policies such as purchase restrictions and relaxation. The motivation to absorb the relaxation of purchase restrictions lies with residents' households, and in terms of government acquisitions, it is clear that the digestion of such inventory stems from part of the government's financial resources. This kind of policy signal is very significant and provides very strong confidence in local inventory removal. It is expected that other cities may follow suit in the future.

Tianfeng Securities believes that the government's acquisition of existing housing stock can theoretically reduce inventory levels, ease downward pressure on the real estate market, and achieve some of the goals of the three major projects by changing the use to affordable housing.

The benefits are coming intensively

It is worth mentioning that earlier yesterday, a screenshot was posted online. It mentioned that “China is considering the government buying houses that have not yet been sold to ease oversupply.”

Stimulated by this favorable news, the A-share real estate sector bucked the trend. By the close, individual stocks such as Everbright Garbo, Tiandi Yuan, and Yunnan City Investment had risen or stopped.$5i5j Holding Group (000560.SZ)$,$Cinda Real Estate (600657.SH)$,$Shenzhen SDG Service (300917.SZ)$,$Hangzhou Binjiang Real Estate Group (002244.SZ)$,$Zhuhai Huafa Properties (600325.SH)$It surged more than 5%,$China Merchants Shekou Industrial Zone Holdings (001979.SZ)$,$Poly Developments and Holdings Group (600048.SH)$,$China Vanke Co.,Ltd. (000002.SZ)$,$Gemdale Corporation (600383.SH)$They also strengthened collectively.

Recently, there has been a lot of positive news about the property market. First, the news that “Nanjing took the lead in lowering interest rates for the first home loan” caused the market to blow the screen.

According to a report by the Shanghai Securities News, we learned from the industry that banks in Nanjing are already preparing to adjust the execution interest rate for the first home loan to 3.45%. On May 15, a person from ICBC's Nanjing Personal Loan Center said that they had received an “oral notice” from the bank today. Starting tomorrow, the mortgage interest rate of 3.45% will be implemented for the first home, and the interest rate for the second home loan will remain unchanged at 4.25%.

At the same time, there have also been major changes in mortgage interest rates in Hangzhou. On May 15, the Hangzhou Daily reported that recently, for two existing homes in Hangzhou that meet the “first set of standards”, the mortgage interest rate can be converted to the first home interest rate.

The transfer of the two interest rates to the first set is based on the actual application of the relaxation of the first home certification after the “May 9 New Deal” for real estate in Hangzhou. The “May 9 New Deal” stipulates that all districts, including the four districts of the main city, have been adjusted to “qualify for the first home on a district basis”. If there is no home under the name of the district where it is located, a new purchase is considered the first home. Therefore, interest rates for two existing housing units in different regions can be converted to the first interest rate. Currently, several banks in Hangzhou have made it clear that they have followed up implementation.

Currently, more and more cities are joining the ranks of phasing out the lower interest rate limit for first home loans. According to data from the China Index Research Institute, up to now, about 60 cities have announced the phased cancellation of the lower interest rate limit for commercial personal housing loans for the first housing unit since 2023.

Analysts pointed out that lower mortgage interest rates in many places will help further reduce mortgage interest rates and home purchase costs.

In addition, favorable policies have also been introduced in Shenzhen. We learned from the Shenzhen Provident Fund Center that in order to better meet the needs of citizens for rigid and improved housing and further improve the level of housing transaction facilitation services, the center can provide free “secured transfer” fund supervision services for second-hand housing to the general public, so that when commercial housing buyers and sellers do not apply for loans from the same bank, sellers can complete the transfer without having to “redeem” the loan ahead of time. The buyer's loan bank directly issues a new loan to repay the seller's original loan. The entire process of fund supervision services provided by the Municipal Provident Fund Center is free of charge.

With the intensive implementation of favorable real estate policies, property markets in many places have begun to show positive signs. According to data from the 58 Anjuke platform, after the purchase restrictions were lifted in Xi'an on May 9, the popularity of online second-hand housing searches increased 22% compared to the previous day, and new homes rose 39%.

Second-hand housing sales in Shenzhen surged 201% month-on-month last week, and the number of properties being sold declined for three consecutive weeks; a property in Xihu District of Hangzhou sold 50 million yuan “at the speed of light” in a single day, and overseas buyers organized a group to “cut the bottom.”

According to the latest weekly report on the real estate industry released by Debon Securities, new and second-hand housing transactions in many places improved month-on-month, and the cumulative year-on-year decline in commercial housing sales area in 30 large and medium-sized cities declined. Last week, commercial housing transactions in 30 large and medium-sized cities were 1.9067 million square meters, a cumulative year-on-year decrease of 42.62%.

Analysts pointed out that judging from the direction of real estate policy, there is still some room for optimization in the later stages, and it is likely that easing will still be the main focus, highlighting “marginal optimization and continuous fine-tuning.”

editor/tolk