The real estate market is entering a new round of inventory reduction cycle. Since the third quarter, the storage of existing homes has entered an accelerated period. According to incomplete statistics, more than 100 cities have expressed support for state-owned enterprises to store homes, including core first-tier and second-tier cities, third-tier and fourth-tier cities, as well as county-level administrative units. Among them, 100 cities have implemented the first batch of housing collection rules, clearly stating the conditions that commercial housing must meet.

Incremental funds supporting land acquisition and storage are also continuously entering the market. Recently, the Minister of Finance made it clear that special bonds will support the recovery of idle land, the addition of new land reserves, and the acquisition of existing commercial housing for use as affordable housing. Policy details are being studied and formulated to accelerate implementation. Industry institutions believe that since the third quarter, central policies have continued to intensify, with a package of macroeconomic policies introduced, which will actively boost the real estate market. The year could mark the beginning of a new round of inventory reduction, with the acquisition of commercial housing for affordable housing expected to help reduce inventory by . billion square meters, aiding the stabilization of the real estate market's fundamentals.

增量资金不断入场
政府“收储”存量房，是指由政府收购已建成的存量商品房，将其用作保障性住房。从收购房源的角度看，具体包括“国企收储未售新房”和“国企收购居民旧房”两种模式。因第二种模式比较分散，现多地在发文推行的，多指“收储未售新房”这种模式。

As early as this month, Vice Premier He Lifeng of the State Council stated that in cities with a high inventory of commercial housing, the government can purchase based on demand and, as appropriate, acquire some commercial housing at reasonable prices for use as affordable housing. The People's Bank of China also announced that it will establish a 100 billion yuan affordable housing refinancing loan to support local state-owned enterprises in acquiring completed but unsold commercial housing at reasonable prices, expected to drive bank loans by 100 billion yuan.

Under policy support, multiple regions have issued documents to support the acquisition of existing commercial housing. According to statistics from CRIC, over cities have expressed support for state-owned enterprises to acquire these properties. This includes core first- and second-tier cities like Guangzhou and Shenzhen, as well as third- and fourth-tier cities like Pingxiang and Chuzhou, and even county-level administrative units like Lankao, Guannan, and Chibi. Among these, 100 cities have already implemented detailed guidelines for the first batch of housing collection.

However, compared to the number of cities that have issued supportive documents, the scale of cities that have actually implemented and transformed these policies is not large. According to CRIC, as of now, there are not many cities that have completed the storage and even converted them into affordable housing and put them into operation. Only a few cities such as Fuzhou, Chongqing, Tianjin, Qingdao, Zhengzhou, and Wuhan have projects implemented. Among them, Fuzhou, Chongqing, Tianjin, and Qingdao are pilot cities for the rental housing loan support plan, and most of the acquired projects are used for rental rather than sale.

Open-source Securities stated that based on the implementation of reserves across various regions, the progress remains relatively slow. The main bottleneck lies in the limited number of projects that meet the reserve conditions, and the primary challenge is that the current rental return rate cannot achieve "commercial sustainability." In fact, funding issues have always been one of the pain points in past reserve work. Pacific Securities noted that achieving a balance in the "reserve" income of existing properties is difficult, with significant capital occupation and potential gaps, and there is a need to expand sources of funding.

Taking Zhengzhou as an example, Zhengzhou Chengfa Anju, as the operation entity of affordable housing for Zhengzhou Chengfa, primarily sources its funds for acquiring existing housing from the following: firstly, its own funds raised by Chengfa Anju, accounting for approximately %; secondly, project-related financing, where after Chengfa Anju reaches an acquisition agreement with real estate developers, bank assessors evaluate the project to determine the loan ratio and amount; thirdly, government acquisition subsidies and interest subsidies.

To advance the progress of reserve collection, policy measures have been continuously released since the third quarter, with incremental funds steadily entering the market. According to the latest news, within the central bank's RMB 100 billion in affordable housing loans, the central bank's funding support ratio will be increased from 70% to 100%. This means the central bank will provide full funding support, reducing the cost of funds and lending risks for commercial banks, which is expected to enhance the enthusiasm of commercial banks for loan disbursement and accelerate the progress of local state-owned enterprises in reserve collection.

At the recent NPC press conference, the Minister of Finance explicitly stated that support will be provided for special bonds to facilitate the recovery of idle land, new land reserves, and the acquisition of existing commercial housing for use as affordable housing. The Ministry of Finance is working with relevant departments to develop detailed policy guidelines to expedite the implementation. Chen Wenshuai, Director of Policy Research at China Index Academy, noted that the policy for local special bonds to acquire existing commercial housing for affordable housing is being finalized and will be implemented more quickly. Currently, special loans for urban village renovation and local special bonds can serve as additional funds for acquiring existing commercial housing. With the continuous allocation of these additional funds, the pace of local governments acquiring existing commercial housing will accelerate.

有望消耗过亿平方米库存
地方收购存量商品房后，有的转为配租型保障房、有的转为配售型保障房，对当地楼市影响又有多大？以郑州为例，今年7月29日，郑州市正式开始首批配售型保障性住房配售工作，成为全国范围内率先开启“配售型保障性住房”配售交付的城市，首批有3个配售项目和1个预登记项目，共计1999套房源。

From the market response, a total of three projects have drawn lots for households (including substitutes). According to research by Zhengzhou institutions, the Qinheyuan and Huikangjiayuan housing projects have a 100% probability of selling out due to their favorable locations and affordable prices, both being fully subscribed in the lotteries. In comparison, Xuesongyuan is less popular. It is worth noting that due to the low prices of affordable housing, excessive market entry is bound to impact nearby projects catering to first-time homebuyers.

CRIC says that the prices of the first batch of affordable housing in Zhengzhou are around % to % of the average price of new homes in the surrounding areas. The surrounding commercial residential properties below 100 square meters sold 1,000 units in a certain month, with an average price of 10,000 yuan/square meter, and about % of the projects reduced their prices that month. "Even if some cities may experience a short-term intensification of internal market competition, from the perspective of local governments and troubled enterprises, the benefits still outweigh the drawbacks," CRIC says. For real estate companies, if the proportion of purchasing existing housing increases later, it will more effectively alleviate the pressure on corporate cash flow and sales, helping to reduce inventory.

If converted to rental-based affordable housing, due to the lower-than-average rent compared to surrounding areas and the well-developed supporting facilities, such housing often achieves good leasing results. Renting, compared to purchasing, offers controllable costs, making it attractive to some刚需 individuals. Overall, the work of acquiring and storing existing housing stock is of great significance for reducing inventory in the current real estate market.

"From the perspective of the area of real estate for sale, since the beginning, China's real estate inventory has re-entered an upward phase. As of the month, the area of commercial housing for sale has reached . billion square meters, surpassing the peak level at the end of the previous year," said Kaiyuan Securities. The institution believes that may become the inaugural year of a new round of real estate de-stocking, primarily driven by three factors: the scissors difference between new construction starts and sales, the acquisition of commercial housing for affordable housing, and urban village renovation.

By the end of the first half of the year, China had cumulatively started construction and raised funds for 10 million sets of affordable rental housing; assuming that all subsequent affordable rental housing is contributed by storage, it is expected to help deplete 10 million sets of inventory, and according to an average of 100 square meters per set, it is estimated to help deplete 100 million square meters of inventory. Huafu Securities stated that since 2021, the proportion of existing home inventory has been rising, from 10% in the first half of 2021 to 10% in the first half of 2022, and small-scale non-distressed/private real estate enterprises are under significant pressure from existing home inventory. The accelerated implementation of special bond storage policies is conducive to alleviating the pressure of accumulating existing home inventory, reducing structural liquidity risks in the industry, and promoting "stabilization and recovery" from the supply side.

If the digestion of existing land is taken into account, the pace of real estate moving towards supply-demand balance will accelerate. Guosen Securities stated that the current real estate land inventory is . billion square meters, accounting for %; the unfinished inventory is . billion square meters, accounting for %; the completed inventory is . billion square meters, accounting for %, with a total inventory de-stocking cycle of . years. To reduce the de-stocking cycle to a reasonable level of about . years, assuming an annual spontaneous demand of . billion square meters, the excess inventory would be between . and . billion square meters. The institution noted that whether this demand gap of . to . billion square meters can be filled will be the key to achieving supply-demand equilibrium in .

From a policy perspective, the supply side, which involves reclaiming existing land, requires approximately trillion yuan in funding. The demand side, focusing on urban village renovation and land acquisition, also requires approximately trillion yuan in funding. Only by addressing the core bottlenecks in relevant policies and providing necessary funding can significant progress be made.