China News Service, Beijing, November 5 (Reporter Pang Wuji) The reform of the commercial housing sales system is accelerating in many places in China. From standardizing pre-sales to promoting existing home sales, from strengthening capital supervision to improving financing mechanisms, the reform is extending to the entire chain of real estate development, financing, and sales, promoting the reconstruction of the basic real estate system and the transformation of development models.
The new commercial housing sales policy issued by Hubei Jingmen City on the 5th clarified that commercial housing projects with newly transferred land after August 28 will in principle implement existing housing sales; for projects that implement existing housing sales, the down payment of the land transfer price shall not be less than 50%, and the remaining balance can be paid off within two years at most; a project sponsoring bank system will be implemented.
According to monitoring data from the China Index Research Institute, so far, more than 20 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, and Hangzhou have introduced detailed implementation rules for the reform of the commercial housing sales system, covering first-tier, second-tier, and some third- and fourth-tier cities. Nanchang, Mianyang, Luzhou and other places have publicly solicited opinions on this.
On August 28 this year, the Ministry of Housing and Urban-Rural Development and other three departments issued the "Notice on Improving the Commercial Housing Sales System", which clearly regulated the pre-sale management of commercial housing and effectively and orderly promoted the sales of existing commercial housing.
It has become a common direction to sort out the details of local regulations and use August 28 as the node to "separate old and new", pre-sale projects must meet the requirements such as the capping of the main structure of a single building, and strengthen the supervision of pre-sale funds. At the same time, various localities have made differentiated arrangements in terms of land transfer fee payment, transition of existing projects, and replacement of letters of guarantee based on market conditions.
For example, Beijing and Hangzhou allow the remaining balance of the land transfer price of eligible projects to be extended to be paid within two years; Wuhan and other places support the replacement of pre-sale regulatory capital guarantees; Xi'an has made it clear that for projects that have obtained a construction project planning permit before August 28 and partially processed pre-sale permits, personal housing mortgage loans can be issued according to the original policy.
The impact of sales system reform is extending from the sales end to the land market and housing development.
On November 3, Beijing’s first residential land transfer in accordance with the “8·28 New Deal” was completed. In accordance with relevant requirements, this project gave priority to existing houses for sale. It is worth noting that the land allows the use of a "lifted slab" design to utilize the three-dimensional space above and below ground by setting up a platform.
Experts believe that this means that under the new real estate development model, land supply, planning and design, and housing quality improvements will increasingly be linked. Wu Jing, director of the Real Estate Research Center of Tsinghua University, said that under the pre-sale system, real estate companies pay more attention to turnover speed and scale when calculating projects; under the existing home sales model, companies need to rely on their own funds and project financing to support development, and they must also judge whether the land itself is worth investing.
Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center, also believes that sales of existing homes help achieve "what you see is what you get", forcing real estate companies to pay more attention to product quality, property services and localization needs.
The impact of sales system reform on the market will also be reflected in the pace of housing supply. Pu Zhan, deputy director of the Policy Research Center of the Ministry of Housing and Urban-Rural Development, believes that in the short term, improvements in existing home sales and pre-sale conditions will delay the release of new supply to a certain extent; in the current destocking stage of the real estate market, the implementation of sales system reform can slow down the rate of new supply to a certain extent and help improve the relationship between supply and demand.
In addition to existing home sales, many places have also clearly implemented the project company system and the sponsoring bank system. The former emphasizes that one project corresponds to one project company, strengthening the independent operation of projects and risk isolation; the latter coordinates project financing arrangements by determining the project sponsor bank, and promotes closed operation of funds and earmarked funds. The three systems jointly promote the systematic reshaping of the entire chain of development, financing, and sales. As a result, the business model of real estate companies that relied on pre-sale repayments, rolling development and high-leverage expansion will gradually change. This is also an important step in building a new real estate development model.
