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A real estate sales office in Beijing. Source: Daily Economic News

Beijing has finally taken action to support the "old for new" policy for commercial housing.

On July 19, a reporter from the "Daily Economic News" (hereinafter referred to as the "Daily Economic News reporter" or reporter) learned from the official website of the Beijing Real Estate Association that the Beijing Real Estate Association and the Beijing Real Estate Agency Industry Association jointly issued an initiative for the "old for new" activity of commercial housing in Beijing.

According to the initiative, from now until December 31, 2024, a "old for new" campaign for commercial housing will be carried out in Beijing, calling on developers, intermediary agencies and related service industries across the city to actively participate, provide discounts and full-chain high-quality services for selling old houses and buying new ones, and support home-buying families in "trading old for new".

According to the reporter, 11 real estate agencies including Lianjia, 51home, Maitian and 21st Century Real Estate and 31 real estate projects participated in Beijing's first batch of "old for new" activities. The real estate projects are located in Chaoyang, Shunyi, Changping, Fengtai, Fangshan, Daxing and other areas, involving more than 9,000 new homes.

"Although Beijing was the last city to launch the housing 'old for new' policy, its entry has undoubtedly added new vitality to the promotion of this policy." Yan Yuejin, research director of E-House Research Institute, said that although the pace of Beijing's housing 'old for new' policy is relatively slow, it can learn from the successful experience of other cities to better implement this policy. "The implementation of this policy will help Beijing to revitalize the second-hand housing market and will have a positive impact on the activity of the entire real estate market."

The proposal mentioned that developers provide a 90-day "no-worry return protection period" for buyers who sell old houses for new ones. The company signs a subscription agreement with the buyer, stipulating that within 90 days after paying the deposit, if the old house is successfully sold, the new house transaction will be carried out according to the agreement; if the old house is not sold, the agreement will be terminated according to the agreement, and the deposit will be unconditionally refunded in full within 15 days, and the buyer does not need to bear the liability for breach of contract.

Source | Beijing Real Estate Association official website

In addition, the activity also encourages developers to make concessions, and provides exclusive discounts in various forms such as "discounts on top of discounts" and "special subsidies" on the basis of the original housing prices for buyers who sell old houses for new ones. Intermediary agencies "promote and sell old houses throughout the city" and give priority to new house subscription agreements, promote buyers to exchange houses and provide exclusive commission discounts.

In addition to developers and intermediary agencies, the event also advocates that leasing companies provide transitional rental discounts for people who are changing houses. On the premise that the rent is not higher than the market rental price, rent and commission discounts are provided to support people who are changing houses to live in transition during the replacement period.

As for the specific participation method, the proposal clearly states that Leju Haofang will provide professional services for all parties in this "old for new" activity, including event registration, property display and various convenient services for homebuyers, and information display, preferential recommendations and data summary for participating developers and intermediary agencies. Homebuyers can search for "trade in new" through the Alipay applet to register for this event, or they can directly visit the event area through the official websites of the Beijing Real Estate Association and the Beijing Real Estate Intermediary Industry Association.

According to the reporter, 11 real estate agencies including Lianjia, 51home, Maitian and 21st Century Real Estate and 31 real estate projects participated in Beijing's first batch of "old for new" activities. The real estate projects are located in Chaoyang, Shunyi, Changping, Fengtai, Fangshan, Daxing and other areas.

It is reported that the first batch of 31 new commercial housing projects participating in the initiative involve more than 9,000 housing units.

Source | Beijing Real Estate Association official website

Zhang Dawei, chief analyst of Centaline Property, told the reporter of China Business Network that "trading old for new" can help replacement customers sell their homes quickly, while reducing the cost of home purchases and increasing their willingness to buy. In the current replacement chain, the core is still how to "sell old" quickly. If we want to achieve significant results from a point to a whole, we still need to mobilize resources from multiple parties to cooperate.

According to data from China Index Academy, more than 100 cities across the country have introduced the "old for new" policy for commercial housing. The "old for new" policies in various places are mainly divided into two categories: one is to encourage the introduction of policies to reduce the transaction costs and risks of house exchange, and the other is for local state-owned enterprises to directly purchase second-hand houses and exchange them for new ones.

In fact, Beijing mentioned the concept of "trading old for new" when adjusting its real estate policy in early June this year, and clearly guided the industry association to build a platform for developers, brokerage agencies, and home buyers to connect, encourage developers and brokerage agencies to provide quality services, implement preferential measures, and support home buyers to "trade old for new". Now, this policy has been officially launched, and like Shanghai and other cities before, it belongs to the "agent first selling" model.

Liu Shui, director of corporate research at China Index Academy, said that under this model, the "double commitment" of real estate developers and brokerage agencies facilitates residents to replace their homes, helps stimulate the release of housing demand, and increases market activity. Residents who buy houses first reach an intention to buy a new house with real estate developers. The two commitments of real estate developers and brokerage agencies can relieve residents of their worries, facilitate residents' housing replacement transactions, help stimulate the release of improvement demand, and increase real estate market activity. Real estate companies actively launch projects to participate in the "old for new" activity, which helps to speed up project sales.

According to statistics from the China Index Academy, as of July 18, the number of newly built commercial residential units sold in Beijing this year was 24,839, with a transaction area of ​​2.8848 million square meters; the number of second-hand commercial residential units sold was 83,680, with a transaction area of ​​7.5097 million square meters.

"In the past two months, the overall transaction volume of second-hand houses in Beijing has remained at a high level. Beijing's support for 'old for new' is expected to produce certain positive effects and smooth the chain of first-hand and second-hand houses." Chen Wenjing, director of market research at China Index Academy, said that from the perspective of destocking, local governments will link the supply of affordable housing in accordance with the principle of "ordering by demand", and the pace of collecting and storing built but unsold new houses may be accelerated. Supporting policies for recovering idle stock land and revitalizing stock land are also expected to be implemented faster. At the same time, referring to the "old for new" housing model in Nanjing and Zhengzhou, combined with the "housing ticket" policy, more cities may introduce supporting policies in the second half of 2024 to further promote the release of replacement demand.

Written by Zhen Sujing

Editor｜Chen Mengyu

Cover image source | Daily Economic News file image