Green Book of Housing Market Release Conference & 2011-2012 Housing Situation and Policies Seminar Held in Beijing

Publish Date：2014-04-29 15:24:22

Publish Date: 2014-01-17 10:56:32

The Green Book of Housing Market release conference & 2011-2012 Housing Situation and Policies Seminar, co-sponsored by Institute of Finance and Trade Economics Chinese Academy of Social Sciences, Center for City and Competiveness Chinese Academy of Social Sciences and Social Sciences Academy Press (China), was held in Beijing on Dec. 9, 2011. At the conference, the green book of housing market Annual Report on Development of Housing Market in China (2011-2012), completed by the Urban and Real Estate Economic Research Office of CASS Institute of Finance and Trade Economics, was officially released.

Green Book of Housing Market, comprehensively applying the theories or methods of microeconomics, macroeconomics, public economics etc., has established a housing analysis framework, which is centered with housing market, supported by housing market players, based on housing macro-background and guaranteed by public policies. The book analyzes the housing market operation status in China since 2011, and predicts the development tendency of China’s housing market and its major problems and challenges in 2012. Meanwhile, it also contains thematic analysis on some theories and hot issues related to the current housing market, and therefrom it concludes policy suggestions on how to promote the healthy development of China’s housing market.

Green Book of Housing Market proposes a multi-indicator index system in order to measure the quality, risk, efficiency etc. of China’s housing market. The system includes listed housing corporations index, housing affordability index, financial institutions risk index, the comprehensive index of urban development impact on commercial housing price, housing loans risk index, housing market regulation index, housing social security index etc, which would reasonably assess the healthiness and rationalization of housing market’s critical aspects.

Green Book of Housing Market presents the China’s housing market and its relevant economy, finance and policies since the fourth quarter of 2010 as below: the economy growth has decelerated, but the driving force of housing investment has not decay; the level of urbanization has been steadily improved and the green development has gradually got attention; the global economy recovery has been postponed, and the global housing market differentiation has been aggravated; the real estate regulation has made remarkable success, for the real estate enterprises have, to some extent, highlighted livelihood-orientation in their product development; the homebuyers’ confidence has fallen, and consequently the tenants’ rent has generally increased; the financial institutions’ leading role on commercial housing hasn’t changed and the real estate loan quality remains high, yet the financial risk gradually reveals itself; the housing policies continues to press, and with the pressure, the housing market competitors makes gradual adjustments, so the housing price is stable with a slight decline; the land market has been cooling off and the land price has stopped rising; housing credit supply has slowed down, and the funding of security housing faces insufficiency; housing market supervision has been intensified and achieved a prominent implementation performance; the security housing program has progressed as planned, and the livelihood attribute of housing has got re-confirmation.

Green Book of Housing Market forecasts that in 2012, with appropriate policies and without grave external shocks, the housing market adjustment will hopefully tend to “soft landing”. The forecast will manifest itself in the following aspects: the economy growth will tend to fall slightly, and the new economy will still be in the need of drive; urbanization will be pushed forward continuously, steadily and with significant regional disparity; the global economy growth will drop, so the global housing market resurrection will delay and the differentiation will be further aggravated; the real estate credit may see a cautious relaxation; the land market will continue the cooling trend, but the transaction may rebound slightly; the investment on commodity housing will witness a monthly decline, and on the contrary, investment on security housing will be on a stable rise; developers will be faced with a severe test, for the real estate industry restructuring can be expected soon; policies will be intensified and made some moderate and fine adjustments, developers will sell houses at lower prices or by promotional discounts, thus the expectation of homebuyers will be differentiated; housing sales will slide, but at a low rate; the housing prices will decline gently, and the inflection point of housing price will be successively confirmed around the first quarter.

Green Book of Housing Market points out that the current housing market is confronted with challenges and problems. The capacity of stimulating demand has been decreased, yet inflationary pressure still remains. It’s urgent to improve the urbanization quality, but the resource and environment stress boosts. The development model of real estate industry needs imperative transformation and upgrading, where social responsibility again become the strategic proposition. People who demands housing still purchases with irrational consumer psychology, and on the other hand, the housing demand of sandwich class is still a knotty problem. The dependency of real estate on banking loans is so excessive that the credit risk increases. The real estate regulation and control doesn’t have a consolidated effect; therefore, housing market will be at the risks of retaliatory price rebound and hard landing. The housing security system needs to be deepened, for there is still the dislocation of goal and reality.

Green Book of Housing Market indicates that the regulation and control in 2012 will continue the competition between main housing market players and central regulations, but central government will prevail in initiative and leeway. In order to solve the problems mentioned above, the housing market of 2012 should insist the principle of being sustainable, stable, discriminatory and flexible, and should aim at the control target—return to the rational and healthy housing development. The target can be elaborated as follows: prices in cities with exorbitant house prices will fall, while other cities will keep a stable price; the overall sales will be basically stable, but the sales proportion of security housing and ordinary commercial housing will ascend; the general investment will be appropriately decelerated, yet the investment of security housing and ordinary commercial housing will grow steadily. We strive to implement the tasks of promoting the steady growth of macro-economy and realizing the soft landing of housing market. We should prevent the two market risks, solve the three structural imbalances, and improve the four regulation and control policies, so as to ensure the rational return of housing market development, to contribute to stable economy growth, and meanwhile, to create conditions for long-term, healthy, stable and balanced development of real estate.

To realize the stable economy growth and the housing market soft landing, Green Book of Housing Market proposes measures in particular for the real estate regulation and control.

(1) Continue to unswervingly adhere to strict regulation and improve measures of regulation and administration, so as to prevent retaliatory price rebound. Further improve the policies of housing investment, speculators’ tax and credit inhibiting, complete the supply and consumption of security housing, and continue to implement preferential tax and credit policies. Establish a news conference system so that the press secretaries of associated ministries can timely clarify the various misunderstandings and rumors in housing market, and then markets can respond promptly to the external shocks. Request the local governments to set more accurate and reasonable housing regulation goals; then publicize the implementation results and meet the commitment of regulation performance rewards and punishments stated in accountability system.

(2) Build up an emergency mechanism for real estate regulation, which will contain response plans and emergence mechanism for housing price decline, so as to avoid housing market’s hard landing. Promulgate comprehensive plans at earliest for all possible situations in housing market to protect macro-economy from housing market impact. Specific implementation procedures of policy instruments are as follows: first, when housing price declines to a large degree, we should, combining the exploring of Comfortable Housing Project, resume and increase the finance and tax preferential policies for the common commodity housing; second, if the price falls to a larger degree, monetary policies like down payment relaxation, interest de-rating etc, should be adopted to slow down the decline and alter the expectation; finally, once the price slump at a substantially high speed, particular conditions of home purchase restrictions are permitted to be cautiously relaxed, but the system of reporting to superior department should be implemented in the meantime. Simultaneously, sudden mass disputes, events and criminal offences like returning the housing purchases, creating disturbances etc., possibly causing by the housing price decline, should receive timely disposition and responses.

(3) Explore and implement Comfortable Housing Project, focus on solving the housing problems of middle-income family and actively cultivate the rental market, so as to spur economic growth. First, continuously implement Comfortable Housing Project as planned, sequentially increase the government investment in security housing and successively explore the bond financing of security housing. Second, the emphasis of 2012 will be the exploring and implementation of Comfortable Housing Project; the ordinary commercial housing standard will be re-defined, the eligibility of moderate-income family will also be defined, the directional application should be taken, the moderate-income citizens who meet the income and housing conditions can receive preference and support when purchasing or renting ordinary commercial housing in advance, and the moderate-income family purchasing ordinary commercial housing will obtain privileges like tax deduction and exemption, the housing provident fund loans and mortgage guarantee. Third, cultivate housing rental market. Establish the lessee protection system, while build up lesser preference system, and houses with limited property rights are permitted to rent out.

(4) Commence the research and implementation of deepening the comprehensive supplementary reform of housing system and establish long-term mechanism which will promote the healthy and balanced development of housing market.

Based on its analysis and prediction of housing market situation in 2012, Green Book of Housing Market proposes relevant measures on regulation and development according to the analytical framework. The measures are as follows: (1) prevent monetary policies from over-deflation, enhance the regulatory role of fiscal policies on income distribution, and expand the consumer demand; (2) encourage the industry optimization and improve urbanization quality; (3) strengthen the risk management of real estate enterprises and optimize the professional service quality; (4) elevate the level of real estate policies to social policies, provide reasonable guidance to housing consumption, and perfect the security system; (5) take effective measures to prevent and control the real estate credit risk and construct policy-related housing financial system; (6) intensify the housing rental management and strengthen the regional disparity of policies; (7) perfect the land legal system and endeavor for the land price stabilization; (8) innovate the housing financial products, complete the housing system and explore the security housing fund-raising mechanism; (9) highlight the credit supervision of housing market and improve the registration of tenancy; (10) establish a long-run security housing construction mechanism and expand the fund-raising channel.

Annual Report on Development of Housing Market in China (2011-2012) is an important policy-making reference and research reference for governments of all levels (especially the city government), domestic and foreign enterprises, associated research institutions and the public.