In Half A Month, Chengdu Continued To Take Measures To Control The Property Market, And Chengdu "Provided The Bottom" For House Buyers

In half a month, Chengdu has twice taken steps to regulate the property market. On December, Chengdu municipal government issued the measures for supervising the advance sale of commercial housing (hereinafter referred to as the measures for supervising the advance sale of Chengdu municipal government). According to the measures, all the pre-sale funds of commercial housing in Chengdu will be directly deposited into the supervision account, and the development enterprises shall not collect the purchase money in any other form. The measures shall come into force on January 7, 2021 and shall be valid for three years.

On the supervision of pre-sale payment of commercial housing, Chengdu has issued relevant policies in 2009 and revised in 2015. This time, the new version of the measures, with strong supervision and meticulous measures, can effectively protect the rights and interests of buyers after buying a house.

Half a month ago, the relevant departments of Chengdu government adopted frequent regulatory measures for the real estate market, and started from the supply and demand aspects, continuously playing a combination of "land price and housing price restriction" and "revising the lottery rules of commercial housing".

Why does Chengdu tighten property market regulation recently? According to the feedback from industry insiders, the recent rise in Chengdu's house prices has been highlighted, and the enthusiasm of consumers to buy houses is high; the land transaction price has risen, and the enthusiasm of real estate enterprises to buy land is also high. Behind the good property market, is the market foundation solid?

In September this year, a news report about Chengdu financial institutions' prohibition on providing new financing and loans to Hutchison Huangpu Real Estate (Chengdu) Co., Ltd. caused a sensation. At the same time, it also tore apart the tip of the iceberg that real estate enterprises had previously made high profits by "hoarding land" and "hoarding sales". Hutchison Whampoa transferred a piece of land in 2014 to Yuzhou group, with a direct profit of 3.8 billion.

This event has aroused the attention of the industry to the property market in Chengdu, and the regulation and control may be foreshadowing.

Half a month ago, the relevant departments of Chengdu government frequently used regulatory measures for the real estate market. Photo by Gan Jun

Further protect the rights and interests of buyers

After the domestic epidemic situation stabilized this year, Chengdu also joined the army of property market recovery. Many real estate developers began to queue up to see model houses in the sales department. A number of real estate began to shake the number, and even appeared "ten thousand people shake".

Chengdu has divided the winning rate into demolition, rigid demand and ordinary. In the general lottery, the lowest rate is only 0.62%. Hot selling real estate is basically a second-hand inverted plate. For example, the Greenland Xinli city outside Qingyang District, with an average price of 17400 yuan per square meter, attracted more than 3000 people to line up for 54 suites, and the general winning rate was only 0.62%.

Evergrande Tianfu Peninsula, Tianfu new area, has 360 suites, with an average price of 12500 yuan / m2. On the first day of online registration, there were more than 3000 groups of customers. Finally, 11129 people participated in the lottery, and the average winning rate was 3.23%.

With an average price of 21000 yuan per square meter, the first Tianxi in East 2nd Ring Road has 321 suites, attracting more than 1000 groups of customers to participate in the lottery.

After the epidemic, pent up demand gushed out. Although there are some real estate projects in Chengdu that have been cancelled because of insufficient enrollment, transactions in the real estate market are still upward because of the existence of first-hand and second-hand buildings.

In such a market situation, the market chaos also occurs frequently, such as "collection of tea and water fee", "non filing of full payment", "independent lottery fraud of developers" and so on, which will appear in some projects with lax supervision. In fact, the unfair market environment is the biggest damage to the interests of consumers.

Before the introduction of the construction project supervision and acceptance policy, the total amount of construction and equipment purchase required by the government was 1.0 times of the construction cost of the construction project, which was required to be 1 times of the construction cost of the construction project Other expenses and other expenses for project construction shall not be misappropriated for other purposes.

The newly launched supervision measures for advance collection of commercial housing will implement a special bank account supervision system for the supervision of pre-sale funds, and the supervision amount of pre-sale funds shall be linked with the credit rating of development enterprises. For the large real estate enterprises with good credit, the supervision of advance payment is more relaxed, and the use of advance payment is more flexible at each progress node of project construction. For buyers, the supervision of advance collection will minimize the possibility of unfinished houses, reduce the risk of purchasing future houses, and provide greater protection.

According to the information released by Chengdu housing and Construction Bureau, in order to protect the construction of pre-sale commercial housing project and safeguard the legitimate rights and interests of buyers, relevant departments in Chengdu will supervise the whole process of pre-sale funds. The pre-sale payment refers to the total purchase price paid by the real estate development enterprise to the purchaser who has obtained the pre-sale license of commercial housing and has not completed the parallel completion acceptance of the project to the purchaser. "All the pre-sale funds are entered into the special management account, and the withdrawal of the pre-sale funds within the supervision quota is managed by the node balance", which has the most direct impact on the real estate industry in Chengdu.

The system of "balance payment" forces the idle land development to prevent the end

The whole process supervision of pre-sale funds, in a simple way, is the supervision of the pre-sale funds collected by developers by administrative departments and financial institutions in order to prevent developers from arbitrarily controlling and misappropriating the pre-sale funds, protecting the construction of commercial housing projects, preventing "unfinished business", and safeguarding the rights and interests of buyers.

Industry insiders pointed out that due to the regulatory funds, real estate enterprises can still use it, which is equivalent to a tight hoop curse on enterprises. In the policy issued in 2015, the housing and construction department is only responsible for the formulation of regulatory rules, and only carries out "guidance and supervision" on the supervision of pre-sale payment of commercial housing; the measures clearly stipulates that the supervision agreement must be signed by the developer, the housing and Urban Rural Development Bureau and the bank.

With the strong intervention of the housing and construction department, the bank has basically become a "tool person" to keep the funds. Only with the authorization of the housing and construction department can the regulatory funds be allocated to the developers. This operation can effectively prevent developers from misappropriating the pre-sale funds at will, and reduce the risk of "uncompleted" of real estate due to fund fracture.

As for housing prices, the Measures stipulate that the total price of pre-sale and listing of commercial housing shall be taken as the benchmark. When the project reaches positive or negative zero, the regulatory limit shall not be less than 25%, and in other stages, the regulatory limit shall not be less than 15%. Taking the total price of pre-sale listing of commercial housing as the benchmark, it can play a role in preventing false high listing price of real estate. It has been revealed that some commercial projects in Chengdu are actually sold at 10000 yuan / m2, but developers have registered and listed in the housing and construction department at a price of 50000 yuan / m2 or even higher.

The "measures" stipulate the supervision period of the pre-sale funds, which should start from the pre-sale of the real estate and end at the time of centralized delivery, covering the whole process from the purchase of the house to the delivery of the house. Due to the centralized delivery of housing to end the supervision of pre-sale funds, this forced developers have to do better in the quality and details of projects including landscape, public areas, decoration, etc. If the products made out of "wrong board", by owners of general complaints, developers want to get "balance" is not so simple.

According to senior people in the Chengdu industry, the Measures stipulate the specific implementation of the administrative departments' participation in supervision, so as to better ensure that developers can use their own funds for special purposes, and reduce the risk of uncompleted real estate; when the supervision period is extended to the centralized delivery of real estate, it is equivalent to the developer's pressure on the payment of the balance of the house, which forces the developer to control the quality of the project. This is not true for the real estate enterprises who have won high prices in the next three years It is very important. Once the products are manufactured in a rough way, there will be a risk that the balance will not be obtained. If the regulatory limit is linked with the credit rating of the developer, the chaos in the market will be reduced and a fairer market trading environment will be established. For the case that foreign developers set up branches in Chengdu, the construction funds of the branch can be effectively used in local projects to prevent the group headquarters from embezzling and misappropriating the Chengdu project Construction funds. Some of the "branches have no money and have to cut corners" situation will be greatly improved, and ultimately will benefit Chengdu buyers, reduce the worries of home buyers.

More importantly, the "balance" system introduced in the supervision of pre-sale funds in Chengdu has a great impact on the cash return of real estate enterprises. This is just like setting "conditions" to force real estate enterprises to accelerate the pace of development, strengthen the internal operation system and improve the high-quality management of projects. Also means that the possibility of real estate enterprises covering the plate will be greatly reduced.

Risk control under the three red lines

After many years of development, it will force the developers to improve the quality of their products.

From the perspective of recent Chengdu land market, there is an imbalance between supply and demand in the market. According to the data of the central index Institute, in November 2020, the turnover area of commercial residential buildings in Chengdu increased year on year, with a turnover of 1.998 million square meters, a month on month increase of 59.1% and a year-on-year increase of 7.6%. However, there is a slight shortage of supply in the central urban area of Chengdu, with the supply area of 973000 square meters, a decrease of 3.6% on a month on month basis and a decrease of 60.3% on a year-on-year basis. The inventory area of commercial housing in the central urban area was 15.911 million square meters, down 1.9% month on month and 16.3% year on year. The clearing period was 10.2 months, 5.5 months narrower than the same period last year. As far as Chengdu is concerned, the de chemical cycle is also 10.5 months, 3.6 months narrower than the same period last year.

But Chengdu land supply began to rise, trading volume began to decline. In November, Chengdu launched 33 residential land, about 1.398 million square meters, up 2.8% year-on-year and 83.8% month on month; 20 residential land transactions, about 892000 square meters, decreased by 32.7% year-on-year and increased by 66.0% month on month. At this time, the price of land rose month on month.

The reason is that "Chengdu has some land that has been covered for a long time and has been rotten; the newly taken land is too expensive." A real estate enterprise personage thinks, "as the southwest central city, Chengdu has long been the place where all kinds of real estate enterprises and soldiers have to fight for. The high price of bidding, auction and listing can't make money, especially in the main city. Developers give up most of their cards in the end."

In the past, real estate companies reduced the cost of holding through a large number of land hoarding. Now I am afraid that with the change of development mode, the land in hand will become a risk. Nandu big data research institute monitors 65 large-scale real estate enterprises, and the total land storage of the most land hoarding enterprises has exceeded 240 million square meters. Industry insiders believe that Chengdu's new deal for real estate enterprise development model knock, no less than Hangzhou.

Like the Hangzhou market, in the past two years, the prices of local auction in Chengdu market have risen rapidly, and the profits of real estate enterprises have been compressed. However, many real estate enterprises take land in Chengdu just as they do in Hangzhou. "As long as they enter Chengdu, Sichuan and the West will know that I have entered Chengdu, Sichuan and the west, so as to save more and less advertising expenses." A foreign real estate enterprise in Chengdu said.

The market of Chengdu is not only targeted by foreign real estate enterprises, but also actively participated by local state-owned assets. On December 1, Chengdu launched four pure residential land assignments, all located in mature areas of the main urban area, with a total area of 113 mu. Among them, Jinjiang District launched a total of 2 parcels of land, with the starting floor price of 16800 yuan / m2. The most intense auction was the No.2 parcel of land in Jinjiang District, which was finally won by Jinjiang unified construction and HUAFA, with the consideration of "19300 yuan / square meter + free transfer of 23% of the overall housing". According to qixinbao data, Jinjiang Tongjian is a 100% holding enterprise of state owned assets supervision and Administration Bureau of Jinjiang District, Chengdu.