Xuzhou’s “Eighteen Articles” are released: This city is now in urgent need of awakening its rigid needs

On May 3, the Xuzhou Municipal Housing and Urban-Rural Development Bureau released relevant content of the recently held Xuzhou real estate industry resumption of work and production and relief and problem solving work conference. Relevant departments in Xuzhou proposed 18 specific measures, including lowering mortgage interest rates, reducing down payment ratios, easing sales restrictions, extending home purchase subsidies for talents, and reducing deposits for land auctions, etc., to activate the market as soon as possible.

After Nanjing, Wuxi and other places optimized and adjusted their property market policies, Xuzhou, known as the "thorough of five provinces", also optimized and adjusted its property market policies. Xuzhou’s housing prices have risen rapidly in the past six years.

Xuzhou’s “Eighteen Articles”

With the purpose of solving problems, the Xuzhou real estate industry’s resumption of work and production and relief and problem-solving work conference introduced a number of measures to activate the market. Specifically, Generally speaking, the main contents include the following aspects:

1. In terms of land supply, Xuzhou will accurately release residential land according to market changes, and control the scale of land supply in areas with long decontamination cycles; list land for transfer The bidding deposit shall be paid according to the starting price of the land listing adjusted from the original 100 to 50. The remaining transfer fee shall be paid before applying for the construction project planning permit, which shall not exceed 6 months; when applying for the pre-sale permit of commercial housing, the remaining transfer fee shall be paid in full. If the land is mortgaged, the land mortgage rights corresponding to the pre-sold houses in this batch must be cancelled. The mortgagee and the mortgagor shall make an agreement and submit an application to the real estate registration department; the registration department will notify the agreed content according to the application of both parties. Make a note in the corresponding real estate registration book to cancel the mortgage of the pre-sold part of the land use rights. If a project under construction is used as a mortgage, the real estate that requires a pre-sale permit must be canceled in batches, and the remaining portion must be registered for a change in the mortgage rights of the project under construction.

2. In terms of increasing credit support, Xuzhou guides financial institutions to increase the issuance of personal housing mortgage loans and lower housing loan interest rates; financial institutions are encouraged to provide first-time home buyers without a house or loan and those who have a house without a loan. Reduce the down payment ratio for second homes; increase loan support for second-hand housing transactions to meet the demand for housing transaction funds and expand financing channels for improved housing.

3. In terms of supporting reasonable housing needs, there is no restriction on the transfer of newly purchased commercial residences with an area of ??more than 144 square meters; the talent purchase subsidy policy continues the provisions of the "Xuzhou City "555" Talent Introduction Project Implementation Plan.

4. In terms of adjusting the policy on the use of housing provident funds, the provident fund payment and deposit work for flexible employment personnel (self-employed persons, freelancers and new citizens) will be launched citywide, and they will enjoy the housing provident fund loan interest rate in accordance with regulations; simplify The provident fund loan process for employees in the Huaihai Economic Zone to purchase houses in Xu supports home buyers to apply for housing provident fund deposits in other places through the "inter-provincial universal" platform.

5. In terms of providing relief policies to real estate companies and optimizing the market business environment, we will increase support for project loans and merger and acquisition loans, and actively extend and renew loans to distressed companies to effectively ease the development Corporate capital pressure; optimize the withdrawal node of commercial housing pre-sale supervision funds, from the original pre-sale batch to withdrawal of key supervision funds per building. Pilot the use of bank guarantees for regulatory funds for pre-sales of commercial housing.

People from local real estate companies believe that Xuzhou’s optimization and adjustment of property market policies are relatively routine. A developer who just entered the Xuzhou market last year said that the current property market should directly focus on the demand side. Xuzhou is a market dominated by rigid demand and needs to increase confidence.

Song Hongwei, research director of Tongce Research Institute, pointed out that Xuzhou’s bailout policy has a positive effect on stabilizing the economy and real estate market, and small and micro business owners and individual industrial and commercial households are currently the main home buying groups. Through tax relief and related policy support, companies can be helped to tide over difficulties and avoid excessive unemployment. At the same time, for individuals, job stability is an important guarantee for home purchase expectations and an important support for home purchase confidence. With the adjustment of relevant policies in the real estate industry, it is expected that relevant supporting policies will be introduced on the financing side, land side and home purchase side, which will have a positive impact on further stabilizing the real estate market.

A market that once rose rapidly

According to statistics from a local third-party agency in Xuzhou, in 2015, the price of new houses within the third ring road of Xuzhou’s property market was around 6,000 yuan/square meter. The price of new houses within the Third Ring Road in Xuzhou ranges from 13,000 yuan/square meter to 15,000 yuan/square meter, with the most expensive properties reaching around 30,000 yuan/square meter. A real estate company official said that the agency's statistics are slightly exaggerated. According to his observation, the current average price in Xuzhou urban area is 12,000 yuan/square meter, and the average price in the counties under its jurisdiction is about 7,000 yuan/square meter.

Data from the National Bureau of Statistics disclosed that since 2016, the price of new homes in Xuzhou has risen for 57 consecutive months. Until November 2020, the price of new homes in Xuzhou fell by 0.1 month-on-month, interrupting a nearly 5-year-long period. year-on-year rise.

Previously, due to the marginal effect of doubling housing prices, the local auction market in Xuzhou was relatively hot.

In 2020, Xuzhou successfully sold 262 pieces of land, with a transaction value of 43.6 billion, a year-on-year increase of 5.6. Among the residential plots sold, 16 had floor prices exceeding 7,000 yuan/square meter. Among them, Nanjing Yiju Real Estate won the former Huadong Machinery Factory D plot No. 2020-15, with a transaction price as high as 16,906.7 yuan/square meter.

In June 2021, Suzhou Yuanli Real Estate, chaired by Li Heli, the former president of Zhongliang Real Estate (02772.HK), acquired two residential lands for sale in Housha, Pizhou through its subsidiaries. The land floor price is 2,820 yuan/square meter (5.1716 million yuan/acre). But this is not the ceiling of land prices in Pizhou. It is understood that no subsequent land transfers in Pizhou are less than 5.6 million per mu.

However, with the decline of the real estate market since last year, the test of Xuzhou's property market has also come.

In 2021, a total of 44 residential lots were transacted in Xuzhou, with a total construction area of ??4.3792 million square meters, a year-on-year decrease of 20.11; the overall transaction floor price was 8,696 yuan/square meter, a year-on-year increase of 55.4, and the premium rate was 45.05. Real estate companies such as Vanke (000002.SZ), Midea Real Estate (03990.HK), China Overseas Real Estate (0688.HK), Country Garden (02007.HK), Poly Real Estate (0119.HK) continue to invest in Xuzhou; real estate investment in Xuzhou for the first time There are also enterprises, such as Zhongtian Beautiful Group, New Hope Real Estate, Huafa Holdings (600325.SH), Jianfa Real Estate (01908.HK), etc., which entered Xuzhou urban area for the first time to acquire land.

In the first quarter of 2022, Xuzhou’s property market performed sluggishly. According to data from CRIC Research Center, in the first quarter of 2022, the supply of commercial housing in the Xuzhou property market was 669,700 square meters, a decrease of 53.34% month-on-month and a decrease of 3.73% year-on-year; the transaction volume was 547,600 square meters, a decrease of 48.44% month-on-month and a year-on-year decrease of 58.78%. From the perspective of the inventory depuration cycle, according to the depuration rate in the past year, the depurchase cycle in February 2021 will be 4.4 months, while the destocking cycle in February 2022 will rise to 10.1 months, and the destocking cycle will be significantly lengthened.

As of the end of February 2022, Tongshan District has the largest inventory, at 1.3813 million square meters; Gulou District has the longest decomposition cycle, at 15 months; the Economic Development Zone, Yunlong District, and Quanshan District have the decomposition cycle All within 9 months.

From March to April 2022, Xuzhou’s real estate sales were around 30% compared with the same period last year.

With sluggish supply and demand and lack of confidence among home buyers, optimization and adjustment of policies are more important. The aforementioned real estate industry insiders pointed out that the most important thing to activate confidence is that relevant policies are improved and people and materials flow; real estate policies are clearer and efforts should be made on the demand side.

Yu Xiaoyu, research director of Yihan Think Tank, pointed out that the core or key of the new round of policy optimization lies on the demand side. For example, cities such as Zhengzhou, Lanzhou, Kunming and other cities have very directly and effectively canceled the "house subscription and loan subscription". It is predicted that many cities will also consider improving loan restriction policies in the future.