China Economic Review: Multiple policies inject confidence into the market

In recent days, policy measures related to the real estate market have been intensively introduced, boosting the confidence of all parties in the stabilization and recovery of the real estate market. On the demand side, reduce the cost of purchasing a house by offering "no need to subscribe for a loan" and "personal income tax refund for purchasing a house"; On the supply side, promote the improvement of financing conditions for real estate enterprises. At the same time, local governments are still expanding the space for adjusting and optimizing policies by making good use of policy toolboxes for urban implementation. "Golden September and Silver October" is the traditional peak sales season in the real estate market. Under various supportive policies, people are full of expectations for the upcoming market in September.

Recently, the Ministry of Housing and Urban Rural Development, the People's Bank of China, and the State Administration of Financial Supervision jointly issued a notice on optimizing the standards for determining the number of housing units in personal housing loans, promoting the implementation of the policy measures of "not recognizing loans but recognizing houses" for purchasing first home loans. The Notice clearly states that when a resident family applies for a loan to purchase commercial housing, if their family members do not have a complete set of housing under the local name, regardless of whether they have used the loan to purchase housing, banking and financial institutions will implement the housing credit policy for the first set of housing. This policy is included in the "One City, One Policy" toolbox for cities to choose from independently.

According to statistics, currently there are still about 18 first and second tier cities implementing the "housing and loan recognition" policy. If a loan has been applied for before, regardless of whether the property is owned or not, the down payment and loan interest rate for the first home cannot be executed. After implementing the policy of "buying a house without buying a loan", especially for families with the improvement demand of "selling one to buy one", it is good news. If they sell a property and have no house under their name, they can enjoy low down payments and low loan interest rates according to the purchase of their first home. The pressure of raising down payments and repaying mortgage loans will be reduced.

"Housing and loan recognition" is a regulatory policy introduced during the overheated stage of the market to curb speculation and speculation. At present, there have been significant changes in the supply and demand relationship in the real estate market, and due to the high cost of purchasing a house, there are still many rigid and improving needs that have not been effectively met. It is necessary to adopt more effective and precise policies to stimulate market vitality.

The current policy adjustment is a manifestation of the policy adjustment, which is to recognize a house without recognizing a loan. This policy will help reduce the cost of housing for residents and better meet the demand for rigid and improved housing. Due to the fact that the main responsibility for real estate regulation lies with local authorities, it is believed that with the implementation of the "housing recognition without loan recognition" policy in various regions, it will have a certain driving effect on the market.

Recently, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban Rural Development issued a notice on continuing the implementation of personal income tax policies related to supporting residents to purchase housing. From January 1, 2024 to December 31, 2025, taxpayers who sell their own housing and purchase new housing in the market within one year after the sale of their current housing will be eligible for tax refund and preferential treatment for the personal income tax already paid on the sale of their current housing.

As early as September 30, 2022, the Ministry of Finance and the State Administration of Taxation issued a notice stating that from October 1, 2022 to December 31, 2023, taxpayers who sell their own housing and purchase new housing in the market within one year after the sale of their current housing will be eligible for a tax refund for the personal income tax already paid on the sale of their current housing. This article by the three departments will continue the previous preferential policies for personal income tax refunds, which will help reduce the expenditure of housing replacement funds for families with improved housing needs, lower the cost of purchasing a house, and promote the release of housing consumption potential.

On August 27, the CSRC's WeChat official account announced that it would balance the primary and secondary markets and optimize the regulatory arrangements for IPO and refinancing, which made it clear that the refinancing of listed real estate companies would not be subject to the restrictions of breaking, breaking and loss. This move is beneficial for listed real estate companies to refinance and alleviate financial pressure. At the same time, the new policies of the China Securities Regulatory Commission on financing in the real estate industry will help all parties, especially commercial banks, asset management institutions and other financial institutions, improve their expectations for the real estate industry and optimize the financing environment for real estate enterprises.

Some cities have actively introduced relevant policies to help stabilize and recover the real estate market. On August 25th, Jiaxing, Zhejiang Province issued 21 measures to further promote the stable and healthy development of the real estate market, which clearly support the reasonable housing demand of all residents and no longer limit the number of housing units to be purchased; All commercial housing is no longer subject to transfer restrictions. Xiamen City has recently reduced the down payment ratio of the housing provident fund for second homes to 40%. Shanxi Province recently announced that it will promote housing consumption, improve housing supply, and explore the sale of existing houses to promote the stable and healthy development of the real estate market. Hunan Province recently proposed to address the dual contradiction of weak demand and poor supply, by managing demand on one hand and optimizing supply on the other, and striving to promote the stable and healthy operation of the real estate market through efforts from both supply and demand sides.

There are more favorable policies for housing than just these. On August 25th, the State Council approved the Guiding Opinions on the Planning and Construction of Affordable Housing, which requires the planning and design of affordable housing to be well done, and the construction to be promoted through reform and innovation methods to ensure the quality of housing construction. At the same time, attention should be paid to strengthening the construction of supporting facilities and public service supply. This indicates that on the basis of building the world's largest housing security system, China is still continuing to promote the construction of affordable housing, with a greater emphasis on the importance of planning, quality, and supporting facilities.

The adjustment and optimization of numerous real estate regulation policies will gradually form a joint force, which will help stabilize expectations and inject confidence into the market. I believe that these more targeted regulatory measures will have a positive impact on the stabilization and recovery of the real estate market.