November 10, the central financial leading group meeting emphasized the need to "dissolve real estate inventory, promote the sustainable development of the real estate industry", "to (real estate) inventory" into the policy vision. November 20, the State Council Legislative Affairs Office announced "housing", "housing", "housing", "housing", "housing", "housing", "housing", "housing", "housing", "housing", "housing", "housing" and "housing". Provident Fund Management Regulations (Revised Draft)", the housing provident fund individual housing loan support securities issue was put on the agenda. Analysts interpreted this to mean that the provident fund system may face deep reforms, and the concept of a national housing bank, which was hotly debated in April 2015, was once again thrown out by the media, entering the public eye and becoming a red word on the Internet. Mr. Liu Yuan, Research Director of Centaline Group, in an article ("Prospect of China's Property Market: Divergence Remains, Recovery Not Easy") recently published on the Chinese website of the Financial Times, put forward the proposal of "de-inventorying (real estate)" - to change the provident fund system into a housing bank. This is a good policy proposal with many advantages, but the disadvantages and difficulties are equally obvious.
The National Housing Bank (NHB), a policy-based residential financial institution, serves to provide housing loans (usually low-interest loans, such as CPF loans) to homebuyers who meet the requirements. It is not a sudden concept, in November 2013, the Third Plenary Session of the 18th Central Committee adopted the "Decision of the Central Committee on a number of major issues on the comprehensive deepening of reform" clearly proposed to "study the establishment of urban infrastructure, residential policy financial institutions", and in April this year, officials of the Ministry of Housing and Construction wrote an article saying that the establishment of a national housing bank in China has basically ripe conditions. In April of this year, an official from the Ministry of Housing and Construction wrote that conditions were basically ripe for the establishment of a national housing bank in China, which also triggered a lot of hot air.
In order to avoid duplication of functions and conflicts with the existing provident fund system, the provident fund system will be transformed into a policy-based non-profit national housing bank, is a more realistic program, and the restructured national housing policy bank, will have the following advantages.
Integrated deployment to improve efficiency of fund use
Currently, China's housing provident funds are under the management of various localities, lacking a unified deployment mechanism and making it difficult to use them across provinces. This has led to a lack of funds in cities with strong demand for loans and having to frequently freeze provident fund loans, while funds in cities with insufficient demand for loans are lying on the books asleep, thus creating an inefficient use of provident fund funds and a mismatch between the supply of funds and the demand for loans. Data show that as of the end of 2014, the national housing provident fund has 3.7 trillion yuan sleeping.
If a national housing policy bank is established at the national level, it can unify the deployment of the nation's housing provident fund and implement asset-liability management, modeled on the unified management of housing provident fund balance positions by commercial banks. Internal fund prices (similar to the FTP mechanism of commercial banks) can be set up to facilitate the inter-regional deployment and compensation of funds, solve the problem of mismatch between fund supply and demand, and improve the efficiency of the use of housing fund.
In addition, the housing bank has a financial function, processing loans without the need to go through traditional commercial banks, which is conducive to improving the efficiency and quality of service and reducing management costs.
Amplification of quota to stimulate demand for home purchase
The current personal provident fund loan amount has long been unable to match the rapid rise in housing prices in recent years, while commercial loans because of high interest rates, difficult to release the money, which undoubtedly curbed the general public's demand for and enthusiasm for home purchase. According to the data published in Liu Yuan's article, of the nation's annual residential sales, provident fund withdrawals and loans accounted for only 10%, while cash accounted for as much as 60%. Looking at this ratio from another angle, it indicates that home buyers are mostly middle- and high-income groups, while the proportion of middle- and low-income earners relying on financial leverage is not high.
The National Housing Policy Bank (NHB), because it is a non-profit bank, can follow the example of Japan's Housing Finance Corporation (HFC) in implementing a policy of differentiating between those who purchase large homes and high-income earners and low- and middle-income families, with the latter not only benefiting from more favorable lending rates, but also having a significantly larger loan amount, in order to stimulate the demand and motivation of eligible low- and middle-income groups.
Counter-cyclical, de-inventorying and stabilizing the real estate market
Currently, China's real estate market is showing a divergent trend, with the inventory digestion cycle in first-tier cities at about 10 months, and inventory de-inventorying data in third- and fourth-tier cities at more than 30 months, far exceeding the reasonable range of 6-18 months, according to Liu Yuan's data. This structural problem of the real estate market, resulting in the past year's real estate "rescue" policy, can only continue to push up a small number of developed cities has been "bubbling" prices, while the third and fourth-tier cities to the role of the property market inventory is extremely limited.
The national housing policy bank can be modeled after the Japanese housing finance public bank system, become a counter-cyclical adjustment tool. In the economic upturn, real estate development hot period, reduce the policy housing loan issuance (reflected in the negative growth), while the same period of commercial housing loans a lot of growth. In the economic downturn, the property market downturn period, commercial housing loan growth slowed down or even negative growth, policy housing loans can increase the injection, play a counter-cyclical adjustment role.
In the face of the structural problems presented by China's property market, the national housing policy bank can implement a differentiated policy to reduce the allocation of funds to the first-tier cities where the property market is booming, and cede more market share to commercial housing loans; and increase the supply of policy housing loans to third- and fourth-tier cities, to stimulate demand from the supply side, to digest the inventory, and to stabilize the real estate market in the third- and fourth-tier cities. As the source of funding for housing banks is often accompanied by a variety of subsidies, this is actually a form of income redistribution, conducive to narrowing the gap between the rich and the poor.
Analysis from the advantages of the housing fund system to the national housing policy bank is very prominent (and even some idealization), the background of the decision-making level of policy support, then the reasons for the delay in landing will have to see the other side of the coin, the difficulties it faces are equally obvious.
Difficulty in financing
The current provident fund deposits in the total amount of 7.4 trillion or so (end of 2014 data), it is difficult to meet the needs of the national housing policy bank to show their hands, the Ministry of Housing and Construction Provident Fund Supervision Secretary Zhang Qiguang previously said that by 2020, the scale of the funds to reach 20 trillion yuan in order to basically satisfy the demand for low-interest loans to meet the needs of the first set of homeowner-occupier housing and improvement. Some analysts believe that it can be raised through the issuance of provident fund housing loan support securities and policy financial bonds, but the actual situation is that housing provident fund loan interest rates are low, the current 5 years below 2.75%, more than 5 years is only 3.25%, the term and yield of policy financial bonds currently do not have any market attraction (compared with the current treasury bonds, 5 years 3.2% or so, 10 years). 3.4% or so). In this case, the financial subsidy, the issuance of housing special policy financial bonds has become the main source of funding channels, in the current fiscal revenue growth rate is declining, which will certainly bring a heavier burden on the Treasury.
Perhaps, in addition to the issuance of fiscal subsidized housing special policy financial bonds, you can also learn from the experience of the German Housing Savings Bank, through the "first deposit and then loan, low-interest mutual aid, closed operation" mode, to attract the residents to deposit the deposit in the Housing Savings Bank, to meet a certain number of years (8 years), you can get 100% of the contract amount of low-interest loans to buy eligible housing. After a certain number of years (8 years), they can get a 100% low-interest loan on the contracted amount to buy an eligible home.
Transformation difficult, management difficult
If the housing fund system into a national housing policy bank, it means that the provident fund management center will be restructured by the institution into a policy financial institution, the original staff face arrangement problems. If, according to some experts, the housing bank started to use the original staff of the provident fund management center, the central establishment of the head office, the local formation of branches and sub-branches, it can be said that the possibility of failure of this transformation is very high. Housing provident fund centers and policy banks, in terms of professional knowledge, business model and scope, intensity of work, work style and so on, there are too many differences, the original provident fund center employees, especially older, professional foundation of the weaker staff, will be difficult to adapt to the work of the new position, which is not through the transfer of training can be solved.
The existing housing provident fund system is currently under local management, the interests involved are complex, once the establishment of a centralized vertical management of housing policy banks, is bound to impact on local vested interests. For example, the existing provident fund are present in a particular commercial bank, once the national housing policy bank was established, these funds will inevitably have to be transferred to the name of its branches, thus forming an impact on the original deposit bank.
Nationalization of housing risk
How to avoid the national housing policy bank on the United States "two houses" of the old way, thus creating systemic financial risk, this is the government, the financial sector and even the real estate sector are worried about a point. In fact, the national housing policy bank and Freddie Mac and Fannie Mae in the ownership and nature of the business is fundamentally different, the former belongs to the state-owned attributes, not for the purpose of profit-making policy banks, while the latter belongs to the U.S. government to support the profitability of the public **** holding company, from this point of view, the former at least did not have to make profits for the risky motives.
(The above answer was posted on 2015-12-16, the current relevant home purchase policy please prevail)
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