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On July 21, Xinhua News Agency was authorized to release 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"), which proposed to accelerate the establishment of a housing system that combines renting and purchasing, and accelerate the construction of a new model for real estate development.

Among them, the Decision proposes to increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. With the advancement of the national development policy of "housing for living, not for speculation", the construction and supply of affordable housing in various places has accelerated. Taking Shanghai as an example, as of the end of June this year, Shanghai has built and raised a total of 376,000 units of affordable housing during the 14th Five-Year Plan period, completing 80% of the total amount of new additions in the 14th Five-Year Plan.

While accelerating construction, many places have also actively explored various ways to raise affordable housing, such as implementing the government's acquisition and storage of existing housing models. Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, told the China Times reporter that the acquisition and storage of housing as affordable housing is a very important channel for revitalizing existing housing, which can effectively reduce inventory, alleviate the problem of tight capital chain of developers, better prevent the risk of capital chain breakage of developers, and avoid problems such as difficulty in housing delivery.

Ensuring diversified housing needs

On July 21, the "Decision of the CPC Central Committee on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization" was officially released, proposing to accelerate the establishment of a housing system that promotes both renting and purchasing, and to accelerate the construction of a new model of real estate development. Increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. Support the diversified housing needs of urban and rural residents. Fully empower city governments to regulate the real estate market and formulate policies based on the city.

Chen Wenjing, director of market research at China Index Academy, believes that the full text of the "Decision" uses an entire paragraph of nearly 160 words to emphasize real estate in the context of improving the social security system. "On the one hand, it shows the central government's emphasis on the development of the real estate industry. On the other hand, it also points out the direction for real estate policies in the next few years."

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." In this regard, industry insiders pointed out that the Decision emphasizes "the 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 improvement needs in the future. At the same time, the emphasis on "diversified" + "improved" housing needs makes it clear that the future will not be a single-track system for affordable housing, but a dual-track supply system of "market + security".

Yan Yuejin, research director of E-House Research Institute, believes that the core housing system in the new round of industry development is the "housing system of both renting and purchasing", which is expected to run through the entire cycle of the new round of real estate development. And there will be a very clear combination of "affordable housing-just-needed housing": "This is not only a very clear positioning of affordable housing, but also a very clear plan for the subsequent housing products of just-needed housing. This policy is very important for local governments to plan just-needed housing products, and it also helps affordable housing to truly play its role of protection."

In Chen Wenjing's view, in recent years, the central government and regulatory authorities have repeatedly emphasized the need to accelerate the establishment of a housing system that promotes both renting and purchasing, and to accelerate the construction of a new model of real estate development. The relevant proposals in this "Decision" top all real estate tasks, and at the same time further emphasize "increasing the construction and supply of affordable housing to meet the rigid housing needs of the working class." This means that the construction and supply of affordable housing may increase significantly in the future, among which rental housing may become more important under the "accelerated establishment of a housing system that promotes both renting and purchasing."

Zhao Ran, director of the ICCRA Housing Rental Industry Research Institute, also pointed out to the China Times reporter that under the guidance of the national policy of "renting and purchasing at the same time", looking forward to the future, it can be expected that the target population of rental services will gradually expand from new citizens and young people with urgent needs to people who want to improve their living conditions. This change will further highlight the importance of rental housing in the new model of overall real estate development.

Many places are accelerating the preparation and construction of affordable housing

The planning and supply of affordable housing is one of the key tasks in building a new model of real estate development and improving the housing supply system of "security + market". At present, my country has established a housing security system that combines renting and purchasing with public rental housing, affordable rental housing and allocated affordable housing as the core.

With the advancement of the national development policy of "housing for living, not for speculation", various regions have attached great importance to the preparation and construction of affordable housing. According to public information, many cities including Shanghai, Hangzhou, Fuzhou, and Jinan have made significant progress.

For example, as of the end of June 2024, Shanghai has built and raised a total of 376,000 affordable rental housing units during the 14th Five-Year Plan period, completing 80% of the planned total, and performing outstandingly among the first-tier cities in the country. Together with the housing sources raised and supplied before the 14th Five-Year Plan, a total of about 513,000 units have been built and raised, and 319,000 units have been supplied, accounting for 86% and 80% of the total planned at the end of the 14th Five-Year Plan period, respectively;

On July 11, the "Semi-annual Progress Report of the 2024 Housing Security and Housing Management Bureau and Municipal Government's People's Livelihood Projects" released by Hangzhou City showed that the city of Hangzhou launched 9,531 affordable rental housing units, completing 119.14% of the annual target task; from January to June this year, the city of Fuzhou raised funds to build 7,263 affordable rental housing units, accounting for 47.6% of the annual plan.

At the same time, many cities have also accelerated the pace of construction of affordable housing. According to the "Chongqing 2024 Housing Development Plan" issued by the Chongqing Municipal Housing and Urban-Rural Construction Committee at the end of June, the city will start construction of more than 7,000 units of allocated affordable housing this year, and add 62 hectares of other residential land such as affordable housing and resettlement housing; On July 10, the first batch of affordable housing construction projects of Guangzhou Anju Group in 2024 officially started. It is reported that Guangzhou Anju Group is accelerating the promotion of 13 projects, and will subsequently promote 3 on-demand construction projects, with a total construction area of ​​about 1.75 million square meters and a total investment of more than 17 billion yuan.

It is worth noting that while accelerating construction, many places have also actively explored various ways to raise funds for affordable housing.

At present, allocation-type and rental-type affordable housing have become the focus of the new round of affordable housing construction. 2024 is the "starting year" of allocation-type affordable housing construction. According to incomplete statistics from the China Index Academy, many cities including Beijing, Shanghai, Guangzhou, Shenzhen, Fuzhou, Jinan, Qingdao, Hangzhou, and Kunming have announced this year's allocation-type affordable housing construction/fundraising plans. Local governments "build according to demand" and plan to build more than 1,000 to more than 10,000 allocation-type affordable housing units this year.

In order to support local state-owned enterprises in purchasing completed but unsold commercial housing at reasonable prices for use as allocated or rented affordable housing, at the regular policy briefing of the State Council on May 17 this year, the People's Bank of China stated that it would set up 300 billion yuan of affordable housing re-loans for relevant local state-owned enterprises, which is expected to drive 500 billion yuan in bank loans; and it will incorporate the rental housing loan support plan into the affordable housing re-loan policy, which will be fully promoted nationwide.

On June 20, the Ministry of Housing and Urban-Rural Development held a video conference on the acquisition of existing commercial housing for use as affordable housing. At the conference, the Ministry of Housing and Urban-Rural Development clearly stated that all localities should promote cities at or above the county level to vigorously, orderly and effectively carry out the acquisition of existing commercial housing for use as affordable housing.

According to statistics from CRIC Real Estate Research, the government's model of acquiring and storing existing housing has been implemented in at least 23 key cities across the country. For example, Zhengzhou announced that it would acquire 5,000 second-hand houses through the Urban Development Group, and Lin'an District of Hangzhou also issued an announcement on the acquisition of existing housing, deciding to acquire 10,000 square meters of housing for public rental housing; Zengcheng District of Guangzhou plans to publicly purchase 20,700 square meters of commercial housing as resettlement housing for the Guangzhou-Shantou Railway project, and the unit price of housing transactions is in principle "land cost + construction cost".

Li Yujia said that "storage" of houses as affordable housing is a very important channel to revitalize existing housing stock. On the one hand, it can effectively destock; on the other hand, it can alleviate the problem of tight capital chain for developers, better prevent the risk of capital chain break for developers, and avoid problems such as difficulty in housing delivery.

It also emphasized that the acquisition targets need to be strictly limited to completed existing commercial housing. At the same time, the area, house type and surrounding facilities need to be fully investigated during the acquisition to ensure that it matches the needs of target groups such as new citizens and achieve an effective combination of "acquisition" and "supply".

Editor-in-charge: Zhang Bei Editor-in-chief: Zhang Yuning