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Scenery of Xi'an. With favorable policies released at the national level, developers in Xi'an that are involved in the "old for new" housing program have launched their own service details. CFP/Photo

Shi Qingling/Sent from Xi'an

Following the launch of the first batch of “old for new” project lists in June, the Xi’an Real Estate Industry Association (hereinafter referred to as “Xi’an Real Estate Association”) recently announced the second batch of “old for new” list: a total of 103 projects, 20 real estate brokerage agencies, and 7 commercial banks have joined the activity.

Regarding the effects brought about by the policy, relevant personnel from the Xi'an Real Estate Association stated that the number of inquiries for many participating projects has reached a climax; the marketing manager of a project in Xi'an's Beilin District also reported that since the start of the activity, the number of calls and visitors inquiring about participating in the "old for new" policy has increased by nearly 30%.

Unlike other cities where state-owned enterprises are involved in the acquisition model, Xi'an's "old for new" is mainly negotiated by the project, homebuyers and brokerage companies to reach a deal. "The brokerage company takes the lead and the three parties sign an old for new agreement. The homebuyer first pays a certain proportion of the earnest money to the real estate company to lock in the house. After the old house is sold, the contract can be signed directly; if it is not sold within the specified time, the earnest money will be returned to the homebuyer unconditionally." said a real estate company person who participated in the housing "old for new".

“Added a promotion channel”

"We have already completed seven or eight transactions through 'old for new' in our project," said a real estate consultant at Xingqing Royal Garden in Xi'an.

Xingqing Royal Garden is one of the first projects in Xi'an to participate in the "old for new" campaign. Xue Yanbin, assistant to the chairman of Shaanxi Baiyun Real Estate Development Co., Ltd., the developer of the project, said in an interview: "After learning about the initiative, the company signed up for the campaign. On the basis of completely abolishing the housing purchase restriction policy, the "old for new" campaign can provide greater discounts and convenience to customers with improvement needs, and better stimulate the vitality of the real estate market."

Xingqing Royal Garden is a shantytown renovation project in Caojiaxiang, Xi'an. The first price was raised in January 2022, and the project was registered in February of the same year and ended with a flat sale. According to the agreement, the project should have been delivered in August 2023, but due to funding issues, the delivery was postponed to June this year. At present, some unsold houses in the community are already ready for sale, which is also an advantage of the project.

However, the project's disadvantages are also obvious. As a shantytown reconstruction community, Xingqing Royal Garden has a high floor area ratio of 7.9 and a relatively high number of households per elevator. Moreover, due to the long development time, the product design is relatively not advantageous, and the product area spans a wide range, ranging from one-bedroom apartments of about 60 square meters to large apartments of 276 square meters.

According to the above-mentioned property consultant, in addition to the regular discounts on site, customers who participate in the "old for new" activity can enjoy an additional 1 percentage point discount.

Compared with Xingqing Royal Garden, other projects are not so lucky. A project manager who participated in the second batch of "old for new" said: "For us, it is equivalent to adding a promotion channel. From the effect point of view, there are many inquiries at present, but no transactions have been completed." Another real estate company that participated in the first batch of "old for new" said that so far, no projects under the company have completed transactions.

When asked about their views on the "old for new" campaign, a person who did not participate in the project said: "The implementation effect is limited, and only projects that have difficulty in selling will participate."

In addition, according to feedback from multiple brokerage agencies, there have been no transaction cases so far.

Second-hand houses that are difficult to sell

In the view of participating companies, the difficulty of the “old for new” activity lies in the fact that second-hand houses are “difficult to sell”.

"Previously, a project under the company had signed an 'old for new' agreement with a home buyer, and provided the owner with an additional 1 percentage point discount. Ultimately, because the home buyer's second-hand house could not be sold within the specified period, the earnest money was finally returned to the buyer." said a business person involved.

"Before, it took 20 to 30 groups to sell one property, but now it takes 19 groups to sell one property. The efficiency of showing properties has improved." A person from a real estate agency said that this was mainly the result of "trading price for volume."

According to the China Real Estate Index System 100-city Price Index, Xi'an's second-hand housing transaction volume has fallen for three consecutive months, and the second-hand housing transaction data has shown an upward trend since July. Data shows that in July, the online registration area of ​​second-hand housing in Xi'an was 980,000 square meters, an increase of about 13% month-on-month; 9,268 residential units were registered online, an increase of about 15% month-on-month and 31% year-on-year. However, the price of second-hand housing is still falling by 0.78% month-on-month, and the decline has increased compared with the previous month.

Ms. Li is a real estate consultant at Shunbang Real Estate, a second-hand brokerage agency in Xi'an. She has been working in the store for 5 years. In July, she sold 3 houses and received a considerable commission. She said: "Although the transaction volume has increased, the price is still falling."

As housing prices continue to fall, buyers and sellers are caught in a tug-of-war.

In 2020, due to the inverted price, Ms. Wang became one of the "10,000 people lottery" in a popular community. She was also lucky to win the lottery and finally chose a house of 196 square meters with a total price of about 4.5 million yuan. After the delivery of the house in 2022, the price of second-hand houses in the community has been rising. Later, due to job transfer, Wang Fei planned to sell the house. Last year, her listing price was 6.8 million yuan with a parking space. The recent offer from the intermediary was less than 6 million yuan, and her psychological expectation was about 6.2 million yuan. "Let's rent it out for the time being. If it continues to drop in the later period, I don't plan to sell it." Ms. Wang said.

“The houses that can be sold quickly are those whose prices have been reduced to the right level,” said the above-mentioned company person.