45 Cities Roll Out New Real Estate Policies, Key Cities See Rising Transactions

On October 28th, Shenyang introduced five new policies for housing provident fund loans, including reducing the minimum down payment ratio for first and second homes to 15%, relaxing the loan term for second-hand housing provident fund loans, increasing the loan limit multiplier for families with multiple children, and adjusting the maximum age for employees to repay provident fund loans, among others. These measures further increase support for purchasing homes with provident funds and reduce the cost of home buying for residents.

On September 26th, the Central Political Bureau meeting clearly stated the need to promote the stabilization and recovery of the real estate market, after which various regions quickly took action and intensified policy support. According to incomplete statistics from the Lin Ping Residential Big Data Research Institute, since the Central Political Bureau meeting in September, as of October 25th, 45 provinces and cities including Hebei, Henan, Sichuan, Beijing, Shanghai, Guangzhou, Shenzhen, Xiamen, Dongguan, and others have issued 53 new policies for the real estate market. The policy direction mainly focuses on canceling restrictive measures such as purchase restrictions, sale restrictions, and standards for ordinary and non-ordinary residences, increasing support for provident funds, and unifying the minimum down payment ratios for first and second homes.

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In the view of interviewed experts, the recent optimization of purchase restrictions, reduction of down payment ratios, and mortgage interest rates is unprecedented in policy intensity, with more noticeable policy effects and a more lasting impact on the market. The transaction volume of the real estate market has increased significantly month-on-month since October. In the future, it is expected that various restrictive measures in different regions will continue to be optimized, and the intensity of policies related to provident funds, home purchase subsidies, and others may continue to be increased. New policies for the renovation of 1 million urban villages and dilapidated houses, and the implementation and improvement of project "white list" supporting policies will gradually be implemented.

The new real estate policies have been intensified. The Central Political Bureau meeting on September 26th further opened the window for real estate policy regulation and pointed out the direction for policy optimization. Relevant departments such as the Ministry of Housing and Urban-Rural Development and the People's Bank of China have launched a "combination punch" of policies from canceling restrictive measures and increasing the support of real estate financial policies, with various regions implementing policies according to their local conditions and quickly responding and implementing them.

Canceling purchase restrictions, sale restrictions, and price restrictions is the focus of this round of policies. Starting at the end of September, Beijing, Shanghai, and Shenzhen have optimized purchase restrictions, while Guangzhou and Tianjin have canceled purchase restrictions, and Hainan Chengmai has exited purchase restrictions. As of now, except for Beijing, Shanghai, Shenzhen, and some cities and counties in Hainan, other cities have no longer imposed purchase restrictions.

The sale restriction policies in various regions are also being phased out. After Shenzhen lifted the sale restriction on September 29th, about 10 cities including Xiamen, Chengdu, Tianjin, Xi'an, Weihai, Quanzhou, Ningde, and Foshan have successively canceled sale restrictions. Shenzhen, Wuxi, Hangzhou, Hohhot, Quanzhou, Xi'an, Tianjin, and other places have successively canceled the price restrictions on new houses.

CRIC Analysis believes that after the Central Political Bureau meeting in September, the restrictive housing transaction policies in various regions have generally been relaxed. Overall, it is a general trend to relax restrictive policies in the future. Except for a few core cities such as Beijing, Shanghai, and Shenzhen, other cities are expected to fully relax restrictive policies such as purchase restrictions, price restrictions, and sale restrictions.

Different from the past, recently, cities such as Beijing, Shanghai, Foshan, Fuzhou, and provinces such as Yunnan and Jiangsu have clearly stated their intention to cancel or plan to cancel the standards for ordinary and non-ordinary residences, focusing on reducing the cost of home buying and changing houses for residents, and supporting the demand for improved housing.

Increasing the support of real estate financial policies is a highlight of the recent adjustment of real estate market policies in various regions. After the People's Bank of China introduced real estate financial support policies such as reducing the interest rates of existing mortgages and unifying the minimum down payment ratios for first and second homes to 15% on September 24th, various regions have actively implemented these policies.Housing provident funds have also become a key focus of recent real estate policies across various regions. Cities such as Shenyang, Tianjin, Dongguan, Taiyuan, Taizhou, Suzhou, and Hanzhong have all introduced relevant policies. The optimization directions include increasing the maximum loan amount for housing provident funds, supporting the transition from commercial loans to public loans, supporting the use of housing provident funds for down payments, and relaxing the requirements for housing provident fund loans, among others.

Recently, the housing subsidy policies in various regions have been further intensified. The China Index Academy has monitored and found that since September, more than 60 cities including Jingmen, Dazhou, Changde, Yichang, and Handan have implemented housing subsidy policies, with some cities providing subsidies for a single house ranging from 60,000 to 100,000 yuan.

Guan Rongxue, a senior analyst at Lin Ping Living Big Data Research Institute, told a reporter from the 21st Century Economic Report that compared to previous policies, the policies introduced by various regions since the Central Political Bureau meeting in September have been intensified, effectively responding to the Central Political Bureau's call to "address public concerns, adjust housing purchase restrictions, and reduce the interest rates on existing mortgages."

Chen Wenjing, the director of policy research at the China Index Academy, told a reporter from the 21st Century Economic Report that compared to the market downturn in 2014, the current restrictions on housing purchases, as well as the down payment ratios and interest rate levels for mortgages, have all become more relaxed, which can be said to be unprecedented in intensity.

The regulation is not only more forceful but also covers a wider range and contains more flexible and refined content. For example, places like Anqing and Pingliang have expanded the scope of housing subsidies to include vocational school students; Tianjin has expanded the use of housing provident fund loans to include affordable housing, and buyers and their spouses, as well as both sets of parents, can withdraw housing provident funds according to Tianjin's current policy for purchasing affordable housing; Shenyang has adjusted the loan term for second-hand housing provident funds from 40 years minus the age of the house to 50 years minus the age of the house, based on the maximum loan term of 30 years.

The new policies continue to show their effects.

After the implementation of the series of policies, Guan Rongxue observed that the effects of the new round of policies are more noticeable than before, and their sustainability has also been enhanced. Since the intensive release of favorable policies for the real estate market in late September, the demand for housing in various regions has been gradually released, and the transaction volume in the real estate market of key cities has continued to rise for three consecutive weeks after the National Day holiday.

The China Index Academy pointed out that the overall transaction volume in the real estate market in October increased month-on-month, with the transaction area in 22 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Wuhan, Suzhou, Dongguan, Ningbo, and Nanning increasing by 23.8% month-on-month, with the first-tier cities seeing the largest increase of 45.69%.

At the same time, Guan Rongxue stated that the continued effectiveness of this round of supporting policies has continuously boosted market confidence. Monitoring data from the Lin Ping Living Big Data Research Institute shows that the market confidence index for the key 50 cities in the 43rd week of 2024 (October 21-27) was -0.8, an increase of 0.01 from the previous week. Looking at the recent trend, the market confidence index has been rising for three consecutive weeks since the 38th week (September 16-22), and after a week of stability, the market confidence index has shown a continuous rise in the past two weeks.

On October 17, Ni Hong, the Minister of Housing and Urban-Rural Development, stated at a press conference held by the State Council Information Office that the next step is to play a "combination of real estate policies," to focus on implementation, to fully demonstrate the policy effects, and to allow residents to enjoy the policy dividends. In the view of the interviewed experts, the relevant real estate support policies in various regions will continue to be introduced.Chen Wenjing stated that in terms of stimulating demand, various regions may have three major policy directions. First, it is essential to implement the supporting policies related to the newly added 1 million urban village renovations and dilapidated housing renovations. Second, there should be a continued reduction in the barriers and costs associated with purchasing homes to promote the release of housing demand, such as core cities further optimizing restrictive policies, lowering transaction commissions, mortgage interest rates, and transaction taxes. Third, based on family and talent situations, housing purchase subsidies should be granted to protected groups, increasing the intensity of subsidies to effectively address basic protection issues, which may be distributed in the form of "housing vouchers."

In terms of optimizing supply, Chen Wenjing indicated that regions may focus on implementing and improving the supporting policies of the project "white list," activating idle land, and addressing the issues of low acquisition prices, mismatched targets, and high capital costs in the process of local state-owned enterprises' land reserves. Efforts should be made to improve the financial situation of real estate companies, intensify the disposal of existing commercial housing, and promote the stable and healthy development of the real estate market.