Some places in China have already introduced policies to help housing companies.
According to incomplete statistics, in recent days, more than 10 provinces and cities, including Wuxi, Shanghai, Tianjin, and Nanjing, have issued various support policies related to real estate, and policy loosening is expected to appear.
Historical similarities are always reminiscent. Although the whole country is still shrouded in the haze of the COVID-19, the “explosive growth” of the property market after the end of the SARS epidemic in 2003 has caused some people to worry. Are we back on the old track of “stimulating real estate to boost the economy”?
I have to say that this conclusion is probably too early and too hasty.
“Hardcore” rescue measures have not yet appeared, first, look at the assistance policies that have been introduced in various places.
Wuxi City, Jiangsu Province, issued 17 policies and measures to support real estate companies and construction companies in a number of ways, including relaxing pre-sale conditions, ensuring liquidity, tax deductions, and allowing deferred payment of land transfer prices.
Wuxi City stipulates that if the building within the scope of which a construction permit has been obtained due to the epidemic situation, it shall be adjusted to the investment amount when applying for pre-sale, and the pre-sale part may complete more than 25% of the investment. You can apply for a delay inland delivery and payment of the transfer fee, which can be processed within 5 working days at the latest after the first-level response measures for epidemic prevention and control in Wuxi City are lifted.
For another example, Xi’an, aimed at the land market to reduce the burden on real estate companies.
Xi’an stipulates that during the epidemic prevention and control period, in principle, the newly-sold land may be determined with bidding security of 20% of the starting price, and 50% of the land transfer price shall be paid within one month after the signing of the transfer contract. Pay in installments as stipulated in the contract, and the payment period shall not exceed one year.
The Shanghai Municipal Planning and Natural Resources Bureau has also issued a land-use support policy to adjust the payment method and duration of land prices.
According to the Shanghai New Deal, affected by the epidemic, failure to pay the land price and delivery of land as stipulated in the land transfer contract is not a breach of contract, excluding late fees and liquidated damages, and the assignee may apply for deferred payment or installment payment.
In Zhejiang Province, restrictions on the use of pre-sale funds for commercial housing have been relaxed to some extent.
Zhejiang stipulates that the pre-sale funds for commercial housing during the epidemic prevention and control period can be used to increase the initial costs of construction, management, sales, financial and other expenses from 20% to 30% of the total. For residential projects completed and accepted before June 30, 2020, residential property warranty payments can be postponed for 3 months.
In Nanchang, it is allowed to postpone the signing of the transaction confirmation and the transfer contract during the land transfer, allow the extension of the payment of the transfer fee, allow the extension of completion and the adjustment of the land transfer bidding security deposit ratio, etc.
Shenzhen has continuously issued a new policy for housing provident funds. On the one hand, companies with difficulties in the impact of the epidemic will be supported in the provident fund deposit ratio and time limit; on the other hand, it is stipulated that hospitalization or quarantine of new coronavirus pneumonia can apply for an extension of public funds. Loan terms, relaxation of deposit requirements for public loan applications, etc.
At present, local policies are relatively prudent. The main focus is on bail-outs for housing companies, alleviating corporate liquidity pressures, and reducing defaults on delivery. The “restrictions on purchases”, “restrictions on loans”. Core control policies such as mortgage rates are rarely involved.
In terms of policy intensity, local policies are still small adjustments based on city policies, and they have not broken the red line of “The house is used to live, not for property speculation.”