2024-09-18
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in april this year, the political bureau of the cpc central committee set the tone: to coordinate the study of policy measures to digest existing real estate and optimize incremental housing, and "old for new" is the policy tool for "destocking".
so far, more than 100 cities across the country have taken advantage of the situation to launch the housing "old for new" policy.in mid-to-late august, wuxi launched an innovative cross-city “old for new” program, the first of its kind in the country.
what is the effect of the new policy? can it help the local property market achieve the dual goals of destocking and stabilizing the decline of new homes?
on april 30, 2024, the political bureau of the cpc central committee held a meeting, and the policy focus shifted to "destocking."
the meeting stressed that it is necessary to combine the new changes in the supply and demand relationship in the real estate market and the people's new expectations for quality housing, coordinate research on policy measures to digest existing housing and optimize incremental housing, speed up the construction of a new real estate development model, and promote high-quality real estate development.
on may 17, the central bank set up a 300 billion yuan refinancing facility for affordable housing to support local state-owned enterprises in acquiring and storing existing housing. on june 20, the ministry of housing and urban-rural development held a meeting to expand the scope of support for the acquisition and storage of existing housing to county-level cities.
similar to the government's purpose of destocking, more than 100 cities have launched a housing "old for new" policy, with the following main operating modes:
the first one, the agency sales model, is the most common and has been implemented in many cities including shanghai and shenzhen.that is, the real estate developer, the intermediary, and the home buyer sign an agreement on the subscription of new homes and the priority sale of second-hand homes. if the second-hand home is successfully sold within the agreed period, the new home subscription agreement will take effect; otherwise, the agreement will be invalid and the home buyer will not be liable for breach of contract.
the second type is the old house exchange model, which has been implemented in cities such as nanjing and zhengzhou.usually, there are four parties involved: the government platform, the new house developer, the homebuyer, and the housing management department. the process is that the homebuyer first selects the intended new house, then the appraisal agency completes the value appraisal of the old house, and then the housing management department completes the preliminary review of the mortgage guarantee of the existing housing, and signs a four-party replacement agreement. then the platform company purchases the existing housing, and the homebuyer signs a new house sales contract with the developer, and finally completes a series of registration and handover procedures.
the third method is to issue replacement subsidies, which is implemented in cities such as shenyang and suzhou.that is, if you sell your old house and buy a new one, you can get corresponding financial subsidies. there are three main ways to measure subsidies: one is tax subsidies, such as changshu subsidizing 50%-80% of the deed tax according to the period of purchase, and xiangyang subsidizing 1.5% of the taxable price for the paid value-added tax; the second is subsidies based on the area of the new house, such as shenyang subsidizing 100 yuan per square meter; the third is subsidies based on the unit, such as zhongshan subsidizing 2,000 yuan of electronic consumer coupons for each unit regardless of area and location.
the fourth type, “old insurance transfer”, was first introduced in zhaoqing.that is, the state-owned assets will lease the existing housing stock for the operation of affordable housing. different from the exchange model, the "old to insurance" does not buy out the ownership of the old house, but pays a one-time rent for 5-10 years. the requirements for the housing source are also not low. for example, zhaoqing stipulates that the housing area should be mainly 40-70 square meters and not more than 90 square meters, and priority will be given to houses with a younger age.
on august 9, 2024, wuxi liangxi urban development group co., ltd. released an upgraded version of the "old for new" commercial housing program, expanding the scope of "old for new" acquisitions to include existing second-hand houses in suzhou and changzhou.citizens can exchange second-hand houses in suzhou and changzhou for new houses in wuxi. this is also the first cross-city housing "old for new" case in china.
the above policies are mainly initiated by local urban investment platforms and belong to the acquisition model.local state-owned capital platforms directly purchase second-hand houses (old houses) from owners, who then use the proceeds from the sale to purchase designated new houses and pay the difference. old houses purchased by local state-owned capital platforms or developers are generally used as affordable housing, talent housing, etc.
from the implementation process point of view, home buyers who need to replace their homes will determine the new real estate project to purchase and subscribe to the source of the house. a professional appraisal company will appraise the "old" house. the old house appraisal process will introduce three professional appraisal agencies with legal qualifications. the customer will randomly select one of the three appraisal agencies to conduct an old house price appraisal. after the buyer and seller reach an agreement on the price, the state-owned enterprise platform or developer will directly purchase the old house, and the sale proceeds will be used to purchase designated new housing projects.
the innovation of wuxi this time is to "exchange old for new" across cities, namely the whole city of wuxi, the whole city of suzhou, the whole city of changzhou, etc.residents who own properties within the scope of the above clauses (residents have normal personal credit, no bad loan records and have the right to dispose of the old house) can participate in the exchange of old commercial housing for new ones in the holding projects of wuxi liangxi urban development group.
judging from the implementation effect of the "old for new" policy across wuxi, the policy was not fully implemented in wuxi until late august.at present, the promoting effect on individual micro projects is more significant, but the boost to the market is relatively limited.
starting from april this year, wuxi launched two batches of housing "old for new" projects, mainly concentrated in liangxi district. judging from official feedback, the effect is indeed good. in just one month, more than 40 people who changed houses in the first batch completed the transaction. by the end of july, more than 2,000 groups had consulted, more than 600 groups had completed the "old for new" registration, and more than 140 groups had finally completed the transaction.
according to cric monitoring data,the popularity is only concentrated in certain areas and projects.the new yunshang shiyue project received good market feedback. since its first launch at the end of april this year, the monthly transaction volume has basically remained at a high level of more than 20 units, with more than 52 units sold in june alone; followed by the old wangshanyue project, which also saw a steady increase in transaction volume, with an average of 4 units sold in the first three months of 2024 and an average of 6 units sold in april-august 2024. among the projects to be launched, the yinglong guanyue project is positioned as high-end, with 21 high-end residential buildings planned to be built, with a courtyard area of about 338 square meters, duplex areas of about 238 square meters and 248 square meters, and small high-rise areas of about 166-233 square meters; the overall attention is relatively high.
for projects such as xiyue chunqiu, jiuli tanyue, and jinshang tianhua, the transaction volume has not improved significantly after the new policy. dahua jinxiu qiancheng project in huishan district also launched the "old for new" policy, with 23 units subscribed in august, ranking second on wuxi's monthly sales list. however, considering that it also launched a 58% discount on special houses to help sell out, the effect of the old for new policy can be basically ignored.
judging from the fundamental data of new home transactions in liangxi district, although the transaction volume has increased, the increase is relatively limited.according to cric monitoring data, the transaction area and proportion of commercial housing in liangxi district have begun to fluctuate upward since april 2024, reaching a temporary peak in june and july, with the monthly transaction area exceeding 28,000 square meters. in july, the proportion of new home transactions in liangxi district was as high as 20%, setting a new high since 2023. although the transaction volume fell in august, the transaction share remained at 15%.
however, if it expands to urban areas, the impact is almost negligible.according to cric monitoring data, the monthly transaction volume in wuxi has basically remained at around 150,000-200,000 square meters since march. the year-on-year decline in new home transactions has shown a narrowing trend since the beginning of this year, but from the perspective of the cumulative year-on-year decline, it still remains at a high level of around 40%.
overall, the current new home transactions are sluggish, and even if the supply decreases, it will be difficult to change the current high inventory situation. the increase in the number of second-hand home listings and the drop in prices will also have a certain substitution effect on the new home market. the policy innovation of "old for new" is precisely to connect the primary and secondary housing markets and encourage residents to sell their existing second-hand homes, thereby effectively shortening the replacement cycle, alleviating replacement pressure, and reducing replacement costs, and in disguised form achieving the purpose of destocking new homes by destocking second-hand homes.
wuxi's innovative cross-city "old for new" policy provides a good reference model for other metropolitan areas and urban clusters. in fact, cross-city housing purchases have been common in the past few years, including those around beijing and shanghai forced to spill over due to housing price pressure, or those in the yangtze river delta and guangdong-hong kong-macao greater bay area due to inconsistencies between work and household registration. with the gradual advancement of the integration process, cross-city "old for new" policy is not only conducive to the efficient activation of existing assets and boosting the new housing market, but also enhances the interaction and integration of various production factors within the metropolitan area, and also helps young talents to move across cities and regions, making it possible for "houses to move with people" and for people to live and work in peace and contentment.
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