How to View the Steady Real Estate Measures: Moderate Increment, Focus on Execution (AI Translation)
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专栏作家 易峘
Columnist Yi Xun
10月17日，国新办就“促进房地产市场平稳健康发展有关情况”举行发布会。住建部部长倪虹和财政部、自然资源部、央行、金融监管总局负责人出席。发布会延续9月政治局会议对地产市场止跌回稳的总体要求，将政策组合拳概括为“四个取消、四个降低、两个增加”，其中的增量政策方面主要包括：1）重提货币化安置、新增实施100万套城中村及危房改造；2）年底前增加“白名单”项目贷款审批通过规模至4万亿元。此外，亦有提及赋予城市政府调控自主权、调整或取消各类住房限制性政策、加大住房保障力度、政策行和央行提供信贷支持等。整体而言，增量政策较为温和，政策重心落于降低居民购房负担，缓解房企、地方政府和地产供应链企业的现金流压力。
On October 17, the State Council Information Office held a press conference on "Promoting the Stable and Healthy Development of the Real Estate Market." Attendees included Housing and Urban-Rural Development Minister Ni Hong, as well as top officials from the Ministry of Finance, Ministry of Natural Resources, the People's Bank of China, and the National Financial Regulatory Administration. The conference adhered to the overall mandate from the Politburo meeting in September to stabilize the real estate market. The policy measures were summarized as "four cancellations, four reductions, and two increases." In terms of new policies, they primarily involve: 1) Reiterating monetary housing relocation, introducing one million units of urban village and dilapidated housing renovation; 2) Increasing the approval scale for "white-listed" project loans to 4 trillion yuan by the end of the year. Additionally, there were discussions on granting municipal governments regulatory autonomy, adjusting or eliminating various housing restrictions, enhancing housing security efforts, and banks and the central bank providing credit support. Overall, the new policies are moderately paced, with the central focus on reducing the burden of home purchases for residents, and alleviating cash flow pressures for real estate companies, local governments, and firms in the real estate supply chain.
本次住建部发布会将政策组合拳总结为“四个取消，四个降低，两个增加”。其中，主要增量政策体现在“两个增加”——1）通过货币化安置方式新增实施100万套城中村改造、危旧房改造；2）年底前将“白名单”项目贷款审批通过规模增加至4万亿元。“四个取消”则包括取消限购、限售、限价、普通住宅和非普通住宅标准，“四个降低”为降低住房公积金贷款利率、首付比例、存量房贷利率，以及“卖旧买新”换购住房的税费负担。具体而言：
At the latest Ministry of Housing and Urban-Rural Development press conference, the policy package was summed up as "four cancellations, four reductions, two increases." The main expansionary policies are reflected in the "two increases": 1) Implementing an additional 1 million units of urban village renovation and dilapidated housing transformation through monetized resettlement; 2) Increasing the approved loan scale for "white list" projects to 4 trillion yuan by the end of the year. The "four cancellations" include the removal of purchase restrictions, sale restrictions, price caps, and standards for ordinary and non-ordinary housing. The "four reductions" refer to lowering the interest rates on housing provident fund loans, reducing down payment ratios, decreasing interest rates on existing mortgages, and lightening the tax burden for upgrading homes by "selling old to buy new." Specifically:
城中村改造方面，会议提出将通过货币化安置方式新增实施100万套城中村改造、危旧房改造，后续各地可根据推进情况继续加大力度。完成时间及执行细节尚未明确。根据住建部数据，全国仅35个大城市就有170万套的城中村改造需求，全国层面共297个地级市预计需求更大；危旧房改造全国则有约50万套。同时，此次强调通过货币化方式，有助于更好满足居民对房型及地点的需求、加速推进过程，并消化存量商品房。此外，各地还可以根据城市更新情况进一步选择条件成熟的项目、后续可以继续加大力度。而项目要求方面，既包括“群众改造意愿强烈、安全隐患比较突出”，又要求“资金大平衡方案能够做到项目总体平衡，避免新增地方债务风险”，项目预期收益率要求或一定程度上影响开发商推进意愿。
In urban village renovation, the meeting proposed adding 1 million units through monetized resettlement for urban village and dilapidated housing renovation. Subsequent efforts can be intensified based on local progress, though completion timing and execution details remain unspecified. According to data from the Ministry of Housing and Urban-Rural Development, there is a demand for 1.7 million units across just 35 large cities, with a potentially greater need across 297 prefecture-level cities nationwide. Approximately 500,000 units require dilapidated housing renovation across the country. Emphasizing monetization helps better meet residents' demands for specific home types and locations, expedites the process, and absorbs surplus housing inventory. Furthermore, localities can select projects with mature conditions in line with urban renewal progress and may increase efforts in the future. Project requirements include "strong desire among residents for renovation and significant safety hazards" as well as demands for a "funding balance that ensures overall project equilibrium, avoiding new local debt risks." Expected project yields may influence developer enthusiasm to some extent.
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- China's State Council press conference outlined a real estate stabilization plan, summing it as "four cancellations, four reductions, and two increases," including lifting restrictions and enhancing credit for projects.
- New policies feature an increase of approved "white-list" project loans to 4 trillion yuan and a plan to renovate 1 million units of urban and deteriorated housing.
- Efforts focus on reducing home purchasing burdens and supporting funding for real estate companies, with measures like lowering interest rates and down payments.
On October 17, the State Council Information Office held a press conference focusing on the stable and healthy development of China's real estate market. Key attendees included officials from various ministries and financial regulatory bodies. The conference sought to align with directives from the September Politburo meeting to stabilize the housing market, introducing policies categorized as "four cancellations, four reductions, and two increases." New directions include monetary relocation in housing, urban village renovation, and raising the approval scale for "white-listed" project loans to 4 trillion yuan. These efforts aim to ease residential purchase burdens and relieve cash flow pressures for key stakeholders within the real estate chain. Significantly, municipal governments are being given greater regulatory autonomy to adjust housing restrictions and enhance security efforts, supported by banks and the central bank's credit measures. [para. 1][para. 3][para. 4]
The policy package, described as "four cancellations, four reductions, and two increases," provides expansive measures like adding 1 million units for urban village redevelopment and increasing "white list" loan approvals to 4 trillion yuan. The "cancellations" target purchase restrictions and price caps, while the "reductions" focus on lowering housing provident fund loan interest rates, down payments, existing mortgage rates, and taxing the "selling old to buy new" option. [para. 5]
Urban village renovation plans to add 1 million units through resettlements, emphasizing monetization to meet diverse resident demands and accelerate the process. With a demand for 1.7 million units across significant urban areas and additional renovations needed for approximately 500,000 units nationally, this strategy intends to aid in housing surplus absorption. Localities with ready conditions can progress accordingly, focusing on residents' renovation desires and safety hazards, all while ensuring financial equilibrium avoids local debt risks. [para. 5][para. 6][para. 7]
Increasing real estate project credit includes expanding "white list" loan issuance to 4 trillion yuan by year's end, aiming to provide crucial liquidity. Current loans total 2.23 trillion yuan, necessitating a 1.77 trillion increase to meet year-end goals. This development reflects the challenge of decreased real estate development funding, which fell 20.2% year-over-year from January to August. Expanding "white list" loans may help mitigate these pressures, preventing risk spillover into the broader economy. [para. 6][para. 8][para. 9]
Efforts to enhance housing security involve optimizing policies for affordable housing and supporting local government use of special bonds to repurpose existing commercial properties. The Ministry of Housing and Urban-Rural Development aims for 1.48 million affordable units constructed or acquired by September. Plans to support new residents and young people involve goals accommodating 4.5 million by year-end. Public rental housing guarantees cover urban low-income families, employing both leasing and monetary subsidies, with provisions for families with children. [para. 8][para. 9][para. 10]
Policies to stimulate real estate demand include lifting home purchase restrictions and reducing purchasing costs, marked by adjustments like lowering existing mortgage rates—saving residents ¥150 billion—and revising down payment ratios. The typical monthly mortgage expense's proportion to disposable income could fall to 6.5% in 2024, echoing 2017 levels, while down payment burdens see significant reductions. [para. 9][para. 10][para. 12][para. 13]
Tax policies align with the "four cancellations," affecting VAT regulations for certain properties and land appreciation tax exemptions. The press conference underscored the positive yet nuanced nature of these announcements, warranting attention to policy details like urban village resettlement monetization and "whitelist" credit expansion. Effective implementation depends on executing entities, return expectations, and funding sources. While some measures may ease cash flow pressures, broader structural debt challenges persist, particularly for distressed companies relying on sales rebounds or improved financing. Overall, policy success and economic stabilization hinge on effectual execution and supportive market conditions. [para. 13][para. 14][para. 15][para. 16]
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