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On July 21, the "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization" (hereinafter referred to as the "Decision") was officially released. Article 44 of the Decision points out the direction for the future development of the real estate industry, involving new real estate development models, a "market + guarantee" dual-track supply system, city-specific policies, real estate financing, real estate taxes and many other aspects.

The Decision points out that we should speed up the establishment of a housing system that promotes both renting and purchasing, and accelerate the construction of a new model for real estate development. We should increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. We should support the diversified housing needs of urban and rural residents. We should fully empower city governments to regulate the real estate market, adopt policies based on the city, and allow relevant cities to cancel or reduce housing purchase restrictions and cancel the standards for ordinary and non-ordinary residences. We should reform the financing methods for real estate development and the pre-sale system for commercial housing. We should improve the real estate tax system.

Yan Yuejin, research director of E-House Research Institute, believes that the content of real estate policies is carried out under the general framework of "improving the system of safeguarding and improving people's livelihood", which means that relevant policies should be considered from the perspective of people's livelihood, especially starting from the most direct and realistic interests of the people, including home purchase and housing prices. In the future, it is necessary to study the new demands and needs of the people's housing livelihood during the new round of reforms, and plan development based on the needs.

Regarding the future housing system, the Decision first clearly states that it is necessary to "accelerate the establishment of a housing system that promotes both renting and purchasing, and accelerate the construction of a new model of real estate development." In Yan Yuejin's view, the core housing system in the new round of industry development is the "housing system that promotes both renting and purchasing," which is expected to run through the entire cycle of the new round of real estate development; and in order to actively promote this system, the new model of real estate development also needs to be actively promoted.

Li Yujia, chief researcher of the Housing Policy Research Center of Guangdong Provincial Urban Planning Institute, believes that building a housing system that combines renting and purchasing, which was written into the reports of the 19th and 20th National Congresses, is the direction of development of my country's housing system in the new era and the main content of housing supply-side reform in the framework of the new real estate model. At present, the main body of housing demand is new citizens, young people, and migrant population, including the working class and talent groups. Their living model is to rent first and then buy.

In recent years, a housing system that combines renting and purchasing has taken shape. Li Yujia said that currently, large-scale rental housing supply accounts for nearly 30% of the total supply in hot cities, and renting a house can provide a place to settle down and enjoy public education.

How to build a development model that better meets the current market demand? The Decision emphasizes that it is necessary to "increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. Support the diversified improvement housing needs of urban and rural residents."

A senior analyst in the real estate industry pointed out that the Decision emphasizes "supply of affordable housing" and that the supply of affordable housing is connected to the rigid needs of the working class, which also means that commercial housing will be more connected to the demand for improvement in the future. At the same time, the emphasis on "diversified" + "improved" housing demand makes it clear that the future will not be a single-track system for affordable housing, but a dual-track supply system of "market + guarantee", in which commercial housing products need to face diversified improvement needs, which also corresponds to the "good housing" that the government has repeatedly emphasized over the past year.

Regarding the current policy control strength in various regions, the "Decision" also stated that "each city government will be fully empowered to regulate the real estate market and adopt policies based on the specific conditions of each city."

Li Yujia believes that giving city governments the autonomy to regulate the real estate market is a way to improve the distribution of power and responsibility between the central and local governments in regulating real estate and achieve equal power and responsibility, which is a manifestation of improving governance capabilities. In other words, giving the power of regulation to local governments will also give local governments the responsibility to stabilize real estate. At a time when cities and regions are differentiated and purchasing groups are differentiated, local governments need to implement city-specific policies on the premise of autonomy in order to manage real estate well.

It is worth mentioning that the Decision also specifically mentioned that "relevant cities are allowed to cancel or reduce housing purchase restrictions and cancel the standards for ordinary and non-ordinary residential properties."

The industry believes that this may mean that cities will further relax their purchase restrictions and the standard for identifying ordinary housing. An insider of a real estate company pointed out that most cities have already implemented the two points of canceling or reducing purchase restrictions and canceling the standard for ordinary housing.

In the view of Zhang Bo, director of 58 Anjuke Research Institute, whether first-tier cities will lift purchase restrictions still depends on the comprehensive effect of multiple factors such as policy orientation, market supply and demand, and economic development. It is relatively certain that cities other than first-tier cities will lift purchase restrictions, or substantially lift purchase restrictions. Due to the strong economic foundation, dense population, and large long-term potential market demand, the possibility of fully lifting purchase restrictions in first-tier cities is relatively small at present. However, with policy adjustments and market changes in the future, it will be an important trend for first-tier cities including Beijing and Shanghai to gradually relax purchase restrictions, such as relaxing home purchase qualifications and reducing social security years.

The cancellation of standards for ordinary and non-ordinary residential properties will also be an important direction for real estate market regulation.

Zhang Bo believes that from the perspective of the Third Plenary Session report, meeting the diverse needs for improvement is an important direction, and the abolition of the general housing standard itself is also a policy adjustment to further align the tax and fee levels of improvement needs and first-time rigid demand, and provide equal protection. From this trend, the tax and fee policies for improvement needs in the future are expected to keep pace with the first-time rigid demand, and better make comprehensive and balanced considerations at the demand level.

The above-mentioned real estate company insiders believe that the abolition of the standards for ordinary residential and non-ordinary residential housing, from the perspective of the dual-track system proposed earlier, is still proposed from the perspective of encouraging improved housing. This is equivalent to raising the threshold for the real estate industry, which is conducive to reducing supply, boosting the confidence of home buyers, and playing a role in maintaining the stability of the market in the medium and long term.

In recent years, due to the problem of new house delivery, the industry has occasionally discussed the abolition of the pre-sale system and the promotion of the sale of existing houses. The "Decision" also mentioned "reforming the financing methods of real estate development and the pre-sale system of commercial housing."

The above-mentioned senior real estate industry analyst believes that the word "reform" rather than "cancellation" is used in the "Decision", which indicates that in the future there will be more adjustments to systemic policies and systems rather than simple cancellations; secondly, discussing and reforming the financing method and the pre-sale system together indicates that the reform of the financing and the reform of the pre-sale system will be complementary and coordinated.

In Li Yujia's view, the financing method means the comprehensive implementation of the white list financing coordination mechanism, namely, strengthening the "consistency" of the financial and housing and construction departments in real estate policies, realizing the housing and construction department's function of real estate supervision, satisfying the reasonable financing of real estate projects, and minimizing financial risks.

Li Yujia believes that after the full implementation of the whitelist financing coordination mechanism, only compliant projects can obtain financing, and compliant projects will definitely obtain reasonable and sufficient financing, and the necessity of high turnover through pre-sales will also decrease. In the future, the development of ready-to-sell houses will be encouraged, and it is expected that there will be supporting policies in terms of land transfer, planning and construction approval, financing and delivery. The transformation from pre-sales to ready-to-sell is also a new development model for real estate.

Other real estate industry analysts pointed out that various financing policy changes, such as total financing management, three red lines, and "double concentration", are aimed at saying goodbye to the "three highs" model of real estate and gradually promoting the sale of existing homes.

Regarding the real estate tax that concerns many home buyers, the "Decision" also mentioned again the need to "improve the real estate tax system."

However, the industry does not believe that this proposal means that real estate tax will be levied immediately. The above-mentioned senior real estate industry analyst pointed out that the real estate tax system does not refer specifically to real estate tax. There are more than 10 real estate-related taxes, including business tax, deed tax, land value-added tax, urban maintenance and construction tax, property tax, personal income tax, corporate income tax, stamp duty, etc. At the same time, the emphasis on "perfection" this time, rather than the previous "promoting legislation" and "doing a good job in pilot projects", may also include more comprehensive content of the reform of the real estate tax system.

In general, Huatai Securities believes that the Third Plenary Session of the 18th CPC Central Committee’s statement on real estate is a medium- to long-term statement, not something that needs to be realized immediately. Overall, all the contents are already being done and foreseeable, and there is no part that exceeds expectations. In the short term, it is necessary to further promote city-specific policies to stabilize the market. In the medium and long term, after the market stabilizes, the existing housing sales system and real estate tax need to be paid attention to.

(This article comes from China Business Network)