state-owned assets are being used to acquire existing housing stock in many locations. what difficulties are there in expanding the scope of acquisition and storage?
2024-09-12
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state-owned assets are being used to acquire existing commercial housing for use as affordable housing in more and more cities.
news on september 12 showed that yinchuan city is for the first time carrying out the work of purchasing completed existing commercial housing for use as affordable housing. from september 9 to 28, completed existing commercial housing will be collected across the city. the scope is the entire building and unit of commercial housing (houses and apartments) that have been completed and not sold within the "ring expressway area" in the urban area of yinchuan city.
according to local plans, yinchuan city will raise 2,764 affordable housing units this year to solve the housing difficulties of more low-income groups and young people in urban areas through the "rental + allocation" model.
coincidentally, news on september 9 showed that hefei anju group plans to acquire existing commercial housing for use as sales-type or rental-type affordable housing, and is now soliciting existing commercial housing in the corresponding administrative areas of hefei city, anhui province.
on september 6, tai'an city also issued the "announcement on the collection of existing commercial housing for use as affordable housing", with tai'an taishan zhixin real estate management co., ltd. as the acquisition entity, collecting existing unsold commercial housing in the main urban area for use as affordable housing at a reasonable price (with the replacement price of affordable housing in the same area as the reference upper limit).
according to incomplete statistics from market institutions, more than 30 cities across the country have issued notices to solicit housing sources, and more than 60 cities have expressed support for state-owned enterprises to purchase existing commercial housing for use as affordable housing.
judging from the current announcements from various places, the acquisition of existing housing has certain standards for the size of the housing, housing quality, supporting resources, etc.
for example, yinchuan requires that: the building area of a single housing unit is no more than 120 square meters; the entire building or unit of the project has not been sold, the completion acceptance filing and first registration have been completed, and the commercial housing pre-sale license has been obtained, the ownership of the house is clear, there is no dispute and it can be traded; the project meets the requirements of financial institutions for issuing loans; the project has complete supporting facilities around it, convenient transportation, and complete relevant supporting facilities.
hefei is similar to this. in terms of housing form, the main types of housing are whole buildings and whole units, which can be closed management. at the same time, according to the standard of "mainly ready-made houses, and fine decoration is preferred", it should be ready-made houses that have been completed and accepted, with complete project-related procedures, clear assets, liabilities and legal relationships, and can apply for real estate certificates, which can meet the loan requirements of financial institutions. the acquisition of housing sources must also meet the requirements of convenient location and transportation, relatively complete supporting facilities, and close to the core area of regional development.
in terms of the purchase price, yinchuan said that the purchase price is based on the replacement price of affordable housing in the same area as the reference upper limit, that is, the combined land cost and construction cost does not exceed 5% profit, and the same is true for tai'an. the purchase price of hefei's existing commercial housing does not exceed the replacement price of affordable housing in the same area, and the upper limit of the rental-type affordable housing is the appraisal price of professional institutions.
the fundraising and construction of allocated rental and sale affordable housing is a long-term project involving social and people's livelihood.
according to a research report by huatai securities, from 2021 to 2023, 5.72 million units of affordable rental housing have been built and raised nationwide, completing 65.7% of the "14th five-year plan" planning target for affordable rental housing. in august 2023, the "guiding opinions on planning and construction of affordable housing" (document no. 14) was issued, and the "sale + rental" of affordable housing construction began to be promoted in parallel.
data shows that from january to june 2024, 1.128 million affordable housing units (including both sales and rental) have been built and raised nationwide, completing 66.2% of the annual plan of 1.704 million units (rooms), and completing an investment of 118.3 billion yuan. "it is expected that sales-based affordable housing will become an important increase in the supply of affordable housing. 40 cities plan to raise a total of nearly 140,000 sales-based affordable housing units in 2024," the research report said.
since the "517 new policy", with the support of central policies, local governments have frequently issued documents to encourage stockpiling. for example, cities such as yinchuan, hefei, and tai'an have all issued documents to purchase existing housing for use as affordable housing, and more and more cities are responding to the policy.
however, judging from the actual scale of implementation, the current pace of state-owned assets acquiring existing housing for use as affordable housing still needs to be accelerated.
on august 16, wuhan's first project of using affordable housing refinancing to acquire existing commercial housing for use as affordable housing was officially launched. wuhan anjia affordable housing co., ltd. acquired the china merchants yuyue project and the airport center phase iii project under china merchants shekou, with an acquisition area of more than 20,000 square meters, which is expected to be converted into more than 500 affordable rental housing units.
zhuhai also disclosed information on the acquisition of existing commercial housing a few days ago. zhuhai huafa industrial co., ltd. announced that it plans to carry out existing commercial housing and supporting parking space trading business with its controlling shareholder zhuhai huafa group co., ltd. or its subsidiaries. the total transaction amount will not exceed 12 billion yuan. the acquired existing commercial housing will be used to increase the supply of affordable, talent housing and commercial rental housing.
in july this year, 154 residential units in fuzhou were publicly listed for transfer in a packaged manner. fuzhou anzhu development co., ltd. finally acquired 154 residential units including luling garden at a reserve price of 273 million yuan, with an average unit price of about 20,000 yuan per square meter. fuzhou anzhu development co., ltd. is a state-owned enterprise in fuzhou, which mainly undertakes the task of converting fuzhou's stored inventory houses into affordable rental housing.
compared with the planned scale, the state-owned assets acquisition and storage has been slow to implement, and how to balance capital is one of the major pain points.
huatai securities said that affordable housing has the attribute of livelihood, and is mainly to solve the housing difficulties of eligible new citizens, young people and other groups. therefore, the rent of allocated affordable housing should be lower than the market rent of the same location and quality, and there is a limit on the annual rent increase; the operation of allocated affordable housing is based on the principle of capital preservation and small profits, and the pricing is based on "land cost + construction cost + moderate and reasonable profit". many places have proposed allocation prices of about 50% of commercial housing in the same area.
"the attribute of 'basic protection' of affordable housing determines that the purchase price cannot be too high. on the one hand, it requires a low-cost source of funds, and on the other hand, it depends on the price game between the two parties of the acquisition." huatai securities said. taking the allocation of rental as an example, the current rental-to-sale ratio in key cities is generally low. in the absence of subsidies, it is still difficult for the operating income after purchase to cover the cost, which affects the expansion of purchase.
in addition to capital balance, the acquisition and storage also need to consider the mismatch between supply and demand. for example, high-level cities have a large demand for affordable housing, but the pressure to destock commercial housing is relatively small, and the rental and sales are relatively low. the motivation to repurchase existing housing is not as strong as that in cities with high inventory. in terms of location, the existing commercial housing that is difficult to sell may have problems such as poor transportation conditions and lack of supporting facilities. the supply of residential and commercial offices in the core areas that meet the acquisition requirements is limited; in terms of project qualifications, existing housing projects that are in urgent need of recovering funds and have a high enthusiasm for acquisition and storage may have complex mortgage and debt relationships, making it difficult to meet acquisition requirements.
to solve the above problems, local governments are also exploring. for example, tai'an city's acquisition of existing housing is based on the working idea of "government-led, market-oriented operation". first, the two basic figures of the demand for affordable housing and the number of existing commercial housing that have been built were fully understood, the acquisition arrangements, acquisition entities and developers were clarified, and management measures were scientifically and reasonably formulated.
in the future, the city will be demand-oriented and aim for sustainable development. it will adhere to the two-pronged approach of "marketization + affordable housing" after repurchase, innovatively formulate an operation and management mechanism for the acquisition of existing housing, make good use of financial support policies, achieve balanced funds and sustainable projects, and ensure the healthy and orderly development of the real estate market.
(this article comes from china business network)
