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The onset of the epidemic has become an excuse for some local governments to try to loosen the property market. However, in recent years, Hainan, which has resolutely broken its real estate dependence, has gone the other way and increased its restrictions on the real estate market again.

Tonight (March 7), the General Office of the Provincial Party Committee of Hainan Province and the General Office of the Provincial Government issued the “Notice on Establishing the Responsibility System for the Urban Real Estate Market’s Steady and Healthy Development” (hereinafter referred to as the “Notice”), Starting from the date of issuance of the document, the sale of commercial housing constructed on newly-sold land will be implemented under the existing home sales system; the province’s household registration and resident households (including both spouses and underage children) who have two or more homes will stop selling and living there. Commodity housing and market-oriented commodity housing.

Whether it is the supply side or the demand side, this “Notice” shows Hainan’s determination to shake off its dependence on real estate. “Newly-sold land” requires the sale of all existing homes, which is a requirement that is enough to “scare” developers. In this once-hot real estate land in Hainan, how much room does a real estate company have to survive?

Screenshot of the official website of the People’s Government of Hainan Province

Considerations for “existing home sales” across the world

The director of the Department of Housing and Urban-Rural Development of the People’s Republic of China, Huo Juyan, said at a press conference that evening that the core content of the “Notice” is to establish a stable and healthy urban main responsibility system for the real estate market, and to propose innovative development of residential products Housing, and the implementation of a multi-set of housing purchase policy for local residents and the existing housing sales system for commercial housing.

The reform of the pre-sale system of commercial housing proposed in the “Notice”, from the date of issuance of the documents, the sale of commercial housing for the construction of newly-sold land will implement the existing housing sales system. According to the State’s “Measures for the Administration of the Sale of Commercial Houses,” the houses sold by existing houses should pass the completion acceptance and the supporting infrastructure such as water supply, power supply, gas, and communications should be ready for use.

For the implementation of the existing home sales system, Huo Juran pointed out that it is mainly to resolve quality complaints, contract disputes, delayed delivery, unfulfilled facilities, illegal sales and even developers collecting money due to the pre-sale system of commercial housing. Series of questions,These issues are the most important factors in real estate complaints and disputes.

“Sales of existing homes” have been piloted in many cities across the country before, but it is rare to see them being implemented globally, like Hainan.

So, will Hainan ’s real estate market heat up further?

Luo Hao, a researcher on the real estate market in Hainan, also pointed out in an interview with the reporter of “Daily Economic News” that the biggest impact of existing house sales on real estate development companies is directly leading to the extension of the cycle of capital withdrawal and the increase in the risk of capital turnover, thereby reducing their land acquisition. Willingness to invest.

Huang Lichong, president of Huisheng International Capital, is relatively optimistic about this policy. He told reporters that the existing home sales system is actually an insurance for the real estate market in Hainan, mainly because of the fear of capital entering the property market again, while reducing supply to reduce oversupply and prevent price collapse.

Local residents are restricted to purchase the third suite

In addition to strictly controlling the behavior of real estate speculation from the supply side, Hainan has further stepped up its suppression of “real estate speculation”.

The Notice points out that to further curb speculative housing speculation and return to the people ’s livelihood and living attributes, and to prevent the occupation of excessive social and public resources, and to provide sufficient space elements for the free trade port construction, local residents have purchased multiple houses. The purchase restriction policy for the province’s household registration and resident households (including both husband and wife and minor children) who already have 2 or more houses in Hainan Province, will stop selling residential housing and market-oriented commodity housing to them.

This regulatory effort has exceeded the imagination of many market participants. Luo Hao believes that the “Notice” has strengthened Hainan’s current real estate purchase restriction policy. The intensity and strength of the purchase restriction policy is the first time in China.

Under the multiple iron fist governance, Hainan’s dependence on real estate has further declined. In 2019, Hainan’s investment in real estate development fell by 22.1% year-on-year. The floor space and sales value of commercial housing fell by 42.1% and 38.8%, the average sales price remained at about 15,000 yuan per square meter, and the ratio of fixed asset investment to regional GDP It fell by 12.4 percentage points to 59.6%.

With this latest announcement, the signal released by Hainan is very clear. Huo Juyan also said that Hainan will continue to adhere to the global purchase restriction policy. Insist on the goal of real estate regulation and control unswervingly, relax the intensity, and keep the policy from changing, maintain the continuity and stability of the policy, support the reasonable demand for self-occupation, and resolutely curb speculative real estate.

At the same time, the Notice also clearly states that Hainan’s cities and counties are responsible for the stable and healthy development of the local real estate market. They should avoid using housing as a tool and means to stimulate economic growth in the short term, adhere to local conditions, comprehensive measures, and stabilize land prices and stability. The responsibility for housing prices and stable expectations has come to fruition. It is necessary to formulate a “one city, one strategy” work plan, put forward annual control targets and specific policies and measures, and strive to keep land prices, house prices, and rent levels within a reasonable range to ensure the real estate market is flat.Stable operation. The implementation of the annual control targets of each city and county shall be evaluated annually.