Will it be promoted nationwide?, Xiong'an New Area cancels pre-sale of commercial housing

The series of real estate policy adjustments, including the cancellation of pre-sale of commercial housing and equal rights for renting and selling in the public service sector, have been confirmed to be implemented in Xiong'an New Area.

According to People's Daily News, recently, the "Beijing Implementation Plan for the Policy of Withdrawing Housing Provident Fund for Non Capital Function Relief Personnel" has been reviewed and approved. Xiong'an New Area has cancelled pre-sale of commercial housing and implemented sales of existing houses and delivery of fine decoration, "what you see is what you get, and when you hand over the house, you hand over the certificate.".

According to Xinhua News Agency, its reporter learned from the Housing Management Center of Xiong'an New Area that Xiong'an New Area supports willing talents to solve housing problems through renting, and has "equal rights for renting and selling" in public services such as education, medical care, and employment.

Cancel pre-sale of commercial housing

According to a report from People's Daily Online, officials in charge of the Housing Management Center in Xiong'an New Area have stated that for those who have stable work and life in Xiong'an New Area, they can purchase market-oriented project sales oriented housing. Xiong'an New Area has creatively cancelled pre-sale of commercial housing and implemented sales of existing houses and delivery of fine decoration, with "what you see is what you get, and the certificate is delivered upon delivery".

As for Xiong'an, the practice of "what you see is what you get, and when you hand over the house, you get the certificate" has already begun. According to CCTV News in March, on the occasion of the sixth anniversary of its establishment, the first housing project for employees of relief enterprises in Xiong'an New Area officially began delivery on March 20th. Through a combination of purchase and rent, it meets the multi-level housing needs of relief enterprise employees in the new area.

It is mentioned that all sales oriented housing in Xiong'an New Area will be sold as existing houses, and real estate registration can also be completed simultaneously when the houses are delivered, truly achieving "what you see is what you get" and "certificate is obtained upon delivery".

The pre-sale system for commercial housing has always been a focus of public controversy. In January of this year, the National Conference on Housing and Urban Rural Development proposed that "those who have the conditions can sell existing houses, and those who continue to implement pre-sales must have their financial supervision responsibilities in place to prevent fund withdrawal and prevent new risks of building delivery."

Industry insiders point out that this is the first time that the Ministry of Housing and Urban Rural Development has systematically and clearly proposed the concept of housing sales. Entering a new cycle, the real estate industry is transitioning smoothly towards a new development model, with ensuring the delivery of buildings and preventing risks becoming the focus of work. In the following month, many cities such as Shandong, Anhui, Henan, and Sichuan have established pilot projects for existing houses.

"Compared to the pre-sale system, the sales of existing houses are more in line with the public's expectations for the sales of commercial housing." Chen Wenjing, Market Research Director of Zhongzhi Research Institute, pointed out that since 2021, many cities such as Beijing, Hangzhou, Hefei, Xi'an, and Ningbo have promoted pilot sales of existing houses.

Chen Wenjing gave an example that in the land auction rules of Shenzhen in July, some plots of land were changed from "competing for self owned rental housing" to "competing for sales area of existing housing", and the pilot process of existing housing sales is constantly advancing; From 2022 to July 2023, more than half of the residential land parcels launched in Beijing have set up a competition for the sales area of existing houses. The government has a strong willingness to promote the sales of existing houses, but there are relatively few plots involved in actual transactions. Since the pilot project in 2021, only nearly 20 plots have been sold, and real estate companies are generally cautious in acquiring land.

"Equal Rights for Rent and Sale" in the Public Service Sector

The exploration of "equal rights for rent and sale" in Xiong'an New Area was also reflected earlier.

According to the news released on the "Xiong'an Release" WeChat official account in February, the management committee of Hebei Xiong'an New Area has issued a series of policy documents related to housing, and established a housing system of "multi subject supply, multi-channel security, rent and purchase simultaneously", marking the basic formation of a housing security system with the characteristics of Xiong'an New Area.

Among them, it is mentioned that Xiong'an New Area vigorously cultivates and develops the housing rental market. In the construction of housing projects in the new area, no less than 30% of "rent only, not for sale" type housing is allocated, and the housing supply scale is reasonably determined and the housing supply layout is arranged in a coordinated manner according to the principles of job and housing balance and moderate advancement. Further improve the principle of equal rights for rent and sale in basic public services such as education, healthcare, and employment, continuously reduce living costs, and enhance the living experience of the public.

At that time, Xiongan also proposed the new concept of "long-term rental means long-term living, and long-term living means settling down" housing consumption, which was considered to mean strong support from Xiongan in the long-term rental consumption market. Yan Yuejin, Research Director of E-House Research Institute, said that this further promotes the boost of rental consumption and also helps to promote a healthier development of the real estate market.

"Xiong'an is an important platform for implementing the new development model of real estate, especially the new rental market, and a front position for reform. Xiong'an especially emphasizes the products and systems of long-term rental, which shows that the reform idea is mature and further promotes the transformation of the housing consumption structure." Yan Yuejin believes that understanding "long-term rental" from the perspective of "life" rather than "residence" means solving problems such as registered residence, children's education, employment and medical care. Xiong'an's system planning in this regard can indeed become a benchmark and learning template for the industry.

Is it expected to be promoted nationwide?

"As a 'experimental field' for reform, the significance of Xiong'an New Area is different from a new policy introduced by a certain city, but rather the new content of China's housing system reform is being tested and reflected in the Xiong'an market." Yan Yuejin believes that it is still necessary to amplify the policy effect, which has a positive effect on our understanding of the subsequent changes in the real estate market.

Chen Wenjing also believes that overall, the reform of the pre-sale system may become an important part of the new development model in the future. However, the current pre-sale sales are still the absolute mainstream model of commercial housing sales in China. Before the financial supporting policies are in place and the supply gap problems that may occur in some core cities are solved, the possibility of fully promoting the sales of existing houses is relatively small.

"It is expected to be promoted in the short term through pilot projects in some core cities or small-scale implementation in some areas," said Chen Wenjing.