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E-mail Xinhua, July 25, 2024
State-owned enterprises (SOEs) in various regions across China have been purchasing existing housing inventory for trade-in deals recently, with some old homes incorporated into the affordable rental housing plan and tenants already moved in.
Last month, China's Ministry of Housing and Urban-Rural Development urged local governments to guide the purchase of completed commercial housing for affordable housing in cities at the county level and above. It was emphasized that homes should be appropriately sized, reasonably priced and located in proper areas.
Following the trial of a trade-in program in Zhengzhou, central China's Henan Province, this April, a local SOE has received 10,000 applications from residents with old properties. It has so far purchased over 3,000 after on-site inspections and price evaluations.
These second-hand houses must meet seven criteria to be eligible for SOE purchase, including being built within the last 20 years, and having an area of less than 120 square meters and no seizure restrictions, among other conditions.
According to the Zhengzhou Research Association for Housing and Real Estate, the number of visits to the sales departments of commercial apartments, second-hand property viewings, and consultations for the trial program have all risen by more than 30 percent monthly in June. The floor area of second-hand houses undergoing transactions has increased by 5.04 percent month-on-month.
In Taicang, a county-level city in east China's Jiangsu Province, a resident can sell a house to an SOE, and buy a newly built commercial property designated by the SOE through a trade-in program. As of the end of June, residents had bought over 288 new commercial houses with a total value of 990 million yuan (about 139 million U.S. dollars), while the SOE Taicang urban development group had purchased 343 old houses worth 520 million yuan.
"The SOE-purchased houses serve as affordable houses. After learning detailed housing information, the relevant authorities recommend it to delivery people, drivers, company employees and others who don't have housing," said Zhu Jianfeng, vice general manager of Taicang urban development group.
At the same time, the affordable houses are listed through online and on-site rental services, Zhu added.
Chen Can, a recent graduate from a university in Beijing and now working in Chongqing Municipality, has just rented and moved into an affordable apartment. It was part of a bulk purchase by the SOE Chongqing Jiayu house leasing company, and is one of the first batches of 95 flats put on the market for rental in the municipality.
"The interior decoration here is new, with appliances and furniture installed. The price is reasonable, and more importantly, it is close to my workplace," said Chen.
According to the Chongqing Jiayu property-leasing company, the operator of the project, each flat in the first batch has an area of around 35 square meters, with a monthly rent of approximately 1,500 yuan, while the current occupancy rate has already exceeded 95 percent.
Chen Wenjing, director of market research at the China Index Academy, said that with SOEs purchasing and converting unsold new commercial houses into affordable housing, working people's housing needs can be more fully satisfied, market inventory can be reduced, and the financial pressure on real estate companies can be alleviated.
"The effect of destocking is direct," she said.
