This is the third “sharp sword” offered by Shenzhen supervisory authorities to commercial apartments in just two years.
Editor’s note: This article is from Economic Observer Online , Author: Chen Po-by Authorized release.
“Buy one less apartment product, and there will be no more apartments in the future.” On the morning of August 1, the sales staff of Xinpan, Longhua District, Shenzhen, were busy sending WeChat to customers, accompanied by successful on-site subscriptions. Video of the apartment.
In the past few days, in Shenzhen, whether it is a developer or an intermediary, the scenes of selling apartments like this can be seen everywhere.
Behind the sudden excitement of the apartment market is the announcement by the Shenzhen Municipal Planning and Natural Resources Bureau (hereinafter referred to as the “Shenzhen Land and Planning Commission”) and the Shenzhen Housing Construction Bureau (hereinafter referred to as the “Shenzhen Housing Construction Bureau”) on July 31 The “Notice on Suspension of Commercial Apartment Approval” (hereinafter referred to as the “Notice”) officially suspended the planning approval and land transfer plan approval of new commercial apartment projects in the city (including the Shenzhen-Shantou Special Cooperation Zone).
This is the third “sharp sword” offered to commercial apartments by Shenzhen supervisory authorities in just two years. On July 31, 2018, in the face of frequent entry of investment funds caused by commercial apartments that were not included in the purchase restriction, and the “shortcut” of developing commercial apartments, Shenzhen used commercial land and industrial land to speculate on the housing market. Jianzhi Commercial Apartments requires all commercial apartments built on new supply land to be rented and not sold and not changed in use. Newly purchased commercial apartments are restricted for sale within 5 years.
However, the “rent only, not sell” policy for developers lasted only one year. On December 12, 2019, Shenzhen announced the cancellation of the “rent only, not sell” policy for commercial apartments. At that time, the Shenzhen Bureau of Housing and Urban-Rural Development discovered that the restriction on the sale of commercial apartments has inhibited the activity of some urban renewal projects. It is not conducive to increasing the supply of commercial housing in the long term, and it is not conducive to the sales of commercial apartments for sale in the short term.
This time the commercial apartments were completely cancelled. The Shenzhen Municipal Commission of Land and Planning and the Shenzhen Municipal Bureau of Housing and Urban-rural Development stated in their interpretation that the commercial apartments played a role in supporting the business office area to a certain extent in the early stage. However, in recent years, the commercial apartments have shown obvious types. The residential trend has deviated from the purpose of “serving business people” and “short-term accommodation”.
Increase residential land
In the first half of this year, the pace of sales of commercial apartments in Shenzhen slowed down. Affected by the 38.5% year-on-year decrease in the total supply area, the transaction area of commercial apartments dropped by 27.9 year-on-year. %.
However, after Shenzhen’s “715 New Deal” property market regulation and control was upgraded, the number of “office tickets” in the Shenzhen market plummeted, The commercial apartment market with unlimited purchases and unlimited loans ushered in a short “spring”.
“Recently, apartment transactions have been relatively hot. The commercial office project Qiaocheng No.1 in Nanshan District, Shenzhen has been in zero transaction for a long time. Three units were sold a week after the New Deal.” A second-level Shenzhen Centaline Property The market planner revealed.
According to the Economic Observer Network, after the implementation of the “715 New Deal”, Vanke Bantian Project has sold more than 300 apartments in a week without launching three-tier market linkage and large-scale advertising.
Investment and speculative demand flows to residential commercial apartments, prompting major first-tier cities with strong demand to find ways to respond. As early as 2017, in order to maintain the order of the real estate market, Shanghai and other cities have stopped approving apartment-style office projects. However, this is only the direct “fuse” for Shenzhen to stop the approval of commercial apartments.
According to the “Shenzhen City Planning Standards and Guidelines”, commercial apartments are classified as commercial land. Shenzhen’s deeper consideration is that it hopes to appropriately increase the proportion of residential land by reducing the scale of commercial land under the background of increasingly prominent contradictions between supply and demand. The above-mentioned “Notice” mentioned the optimization of the planning and layout of the functional land in the main and auxiliary centers and cluster centers, reducing the proportion of commercial land, and increasing the proportion of residential and supporting land.
At the planning level, Shenzhen will study the proportion of urban construction land structure that meets the needs of urban development in the new era, taking the opportunity of preparing a new round of land and space master planning.” Shenzhen Planning and Land Commission and Shenzhen Housing and Urban-rural Development Bureau pointed out in their interpretation.
In Shenzhen’s previous land master plans, the supply and proportion of commercial service and industrial land were relatively large, and residential land accounted for less than 20% of the year. Taking 2019 as an example, Shenzhen plans to supply 1,200 hectares of construction land throughout the year, of which 150 hectares for residential land, accounting for only 12.5%; the supply of commercial service land and industrial land reaches 355 hectares, accounting for 29.6%, which is almost close to residential land. 2.5 times the supply.
Starting from this year, Shenzhen is further increasing the supply of residential land. It plans to supply 293.2 hectares of residential land. Although it has doubled year-on-year, it only accounts for about 25% of the total annual construction land supply, which is still far lower The national average level is about 33%, which is even lower than the international level of over 40%.
On the one hand, there is a serious shortage of residential land, and on the other is the actual population of 22 million, with a net increase of more than 300,000 permanent residents every year and the huge housing demand brought by hundreds of thousands of talented people. The situation is in short supply. Shenzhen housing prices have been rising in recent years.
In the past four years, Shenzhen has repeatedly started regulation from the demand side and the supply side. Now, the problem is solved through the supply side of the root cause, “increase the scale of residential land and increase the supply of public housing from the land structure” is regarded by relevant departments. An effective way to promote the stable and healthy development of the real estate market.
Second half of urban renewal
“In the first half of this year, when we were doing pre-planning plans for some old renovation projects, we found that several old renovation projects need to apply for C1 land (commercial land) Commercial apartment targets, but the planning authority suspended the approval. At that time, the relevant department gave the statement that the policy on commercial apartments was still being adjusted. Developers were asked to wait for the implementation of the policy before continuing.” World Union Bank Group Chief Dong Ji, a work reform consultant, told the Economic Observer Network.
In Shenzhen, due to the fact that there is less net new supply, commercial apartments should rely more on urban renewal. In the urban renewal project, commercial land planning includes three types of business apartments, offices and shops. Dong Ji told the Economic Observation Network that Shenzhen has restrictions on the proportion of commercial land planned into commercial apartments. “According to the policy, the commercial apartment index of an old renovation project can account for up to 50% of the total commercial land; However, in the actual operation process, the upper limit that can be approved by the planning department is only 30%.”
Take an old village reconstruction project as an example. The land properties of the entire old village include residential land, educational land, public facility land, and commercial land. The planning department will separately calculate the plot ratio and total construction area of commercial land during approval. Assuming that the total construction area of commercial land reaches 100,000 square meters, the construction area that can be planned as a commercial apartment can only be 30,000 square meters at most.
“From the point of view of accounting, the vacancy rate in Shenzhen’s office market is relatively high. If the commercial land of the old renovation project is transformed into office and commercial use, the pressure of later decontamination will definitely be greater. Normally, developers make old changes. For the commercial land part, the source of subsequent cash flow still relies on residential products such as commercial apartments.” Dong Ji said.
A person from the Shenzhen area investment and extension of a listed real estate company also mentioned that office and retail products could get some blood back in the early years, but now they are completely losing money.
This means that with the suspension of approval of commercial apartments, the shortcuts for realizing in urban renewal projects are being “blocked”. However, in order to protect the legal rights and interests of the approved commercial apartment projects and ensure a smooth transition to the market, the above-mentioned “Notice” stipulates that the planning has been reviewed and approved by the Shenzhen Municipal Planning Department and the district governments (New District Management Committee) or the construction land planning permission has been passed For commercial apartment projects that have been approved, follow-up approval procedures can be continued in accordance with the original regulations, and will not be affected by the Notice.
For commercial apartment projects that have been approved for planning and have not signed a contract (excluding bids, auctions, and listings), on the basis of meeting the public supporting requirements of schools and other public facilities, and the voluntary basis of development enterprises, the conversion into saleable talent housing is encouraged.
According to statistics from Heyi Urban Renewal Group, as of December 31, 2019, judging from the architectural functions of urban renewal projects approved over the years, the total construction scale of approved commercial apartments is approximately 11 million square meters, accounting for approximately 8%.
“This “Notice” will still have an impact on old renovation projects with relatively large indicators for the construction of commercial apartments. At present, the competent authority has many restrictions on talented housing, and the price is almost 60% of that of ordinary commercial housing. In the old reform project, the profit may not be higher than the construction of commercial apartments.” A person in charge of the old reform of a Hong Kong-listed real estate company told the Economic Observer that it is normal for the affected old reform projects to slow down.
However, Dong Ji said that the choice of whether or not to convert this part of the planned projects into saleable talent housing depends entirely on the developers’ wishes. Therefore, the impact of policies on it is not easy to assess.
A bigger change is reflected in the unapproved commercial apartment project. Heyi Urban Renewal stated that the New Deal will deal with urban renewal projects that are mainly commercial land but whose planning has not been approved by the municipal planning authority and the district governments, or the cooperation agreement signed in the early stage agreed to relocate commercial apartments but failed to pass the planning approval. The impact of the project is relatively large, and in the surplus business environment, it will further increase the difficulty of the project in the future.
“I am accustomed to policy changes when I am doing the old reforms in Shenzhen. The current policies are not good, and perhaps the next policy is good for developers.” The above-mentioned Hong Kong-listed housing companies in charge of the old reforms have become commonplace in the impact of the new policy.
After the “Notice” came out, many developers immediately called Dong Ji for consultation. Dong Ji has been expressing a point of view, since the “Notice” emphasizes the need to optimize the planning and layout of various functional land in the urban center at all levels, and the Shenzhen urban center now basically depends on urban renewal to make room for it. This shows that the proportion of commercial land in future urban renewal projects may decrease, and the proportion of residential land may increase. “For developers, the activity and enthusiasm for participating in urban renewal may increase as a result.”
The person in charge of the above-mentioned Hong Kong-listed housing company’s old reform said that in urban renewal, the proportion of residential housing is inevitable, but more will be increased in the form of talented housing or affordable housing. “This is also forcing developers to take the path of transforming talented housing or affordable housing in the future. After all, if you don’t go this way, the procedures for urban renewal projects will be relatively difficult.”