The first case nationwide this year! In Xinyang, all newly transferred land will fully implement the sale of completed properties, ushering in an era where "what you see is what you get" in home purchases.

Against the backdrop of profound adjustments in the real estate market, local housing policies have witnessed significant breakthroughs.

Recently, Xinyang City in Henan Province has introduced measures to fully implement the sale of completed residential properties for newly transferred land developments. Analysts have noted that Xinyang has become the first city in the country to implement this model this year.

"This measure in Xinyang not only boosts the confidence of homebuyers but also attempts to drive the industry towards a new model by reshaping sales rules," a real estate analyst pointed out.

"The sale of completed residential properties can significantly reduce the potential delivery risks borne by homebuyers, safeguard residents' rights and interests, and optimize the industry ecosystem. In the long run, it is conducive to promoting the stable and healthy development of the housing market and accelerating the construction of a new model for real estate development," said Xu Changjie, an analyst at Huachuang Securities.

Why did Xinyang fire the "first shot" for the sale of completed residential properties this year?

According to the public announcement on the official website of the Xinyang Housing and Urban-Rural Development Bureau, in order to continuously promote the stabilization of the real estate market, effectively manage market-oriented risks in the real estate sector, destocking, and control incremental supply, the Xinyang Housing and Urban-Rural Development Bureau has drafted the "Several Measures on Strengthening the Management of Pre-sale of Commercial Housing (Trial)," which is now open for public consultation. The public consultation period for these measures is from May 6, 2025, to May 15, 2025.

The aforementioned document outlines six measures. The first measure, "Strictly Control Pre-sale Permit Conditions," states that "for commercial housing developments on newly transferred land after the issuance of this document, the sale of completed residential properties shall be uniformly implemented."

Meanwhile, the document clarifies that the time of newly transferred land shall be based on the signing date of the land transfer contract. "This measure shall be implemented from the date of issuance and shall apply to the central urban area. Other counties may refer to and implement it accordingly."

"Xinyang's explicit announcement to implement the sale of completed residential properties for newly transferred plots in the central urban area is the first city nationwide to clearly and comprehensively implement this model recently," said Chen Wenjing, Director of Policy Research at the China Index Academy.

Regarding why Xinyang has chosen to fully implement the sale of completed residential properties for newly transferred plots in the central urban area, Yan Yuejin, Deputy Dean of the E-House China Research Institute, believes that Henan faced challenges with the delivery of pre-sale properties in 2022, with many cases emerging in cities like Xinyang. Therefore, Xinyang's move to "uniformly implement the sale of completed residential properties for newly transferred land" is essentially based on the new situation to mitigate risks associated with the pre-sale model.

"Under the pre-sale model, issues such as developers' high-leverage expansion and misappropriation of funds may lead to project stalls, severely damaging the rights and interests of homebuyers. Xinyang's measures, with the core objectives of 'mitigating risks, destocking, and controlling incremental supply,' aim to cut off the risk transmission chain of pre-sale properties at the source by strictly controlling pre-sale conditions for newly transferred land. This is regarded by the industry as a crucial step in mitigating systemic risks."The industry analyst mentioned above stated.

The analyst pointed out that the Xinyang market is still in the adjustment phase, with significant pressure on inventory reduction. Currently, many new housing projects are already in the state of selling completed properties, and the overall impact of the new policy on the short-term market operation in Xinyang is relatively small.

Yan Jinjin believes that the completed property sales model mentioned in Xinyang this time will have a more direct impact on developers. Real estate companies need to objectively evaluate and better grasp the cost-effectiveness and financial calculations when acquiring land.

It should be noted that the promotion of completed property sales in Xinyang this time is only targeted at newly transferred land, while land transferred before the issuance of the previous document will still be executed according to the original rules.

Can the completed property sales model be fully implemented?

Recently, the completed property sales model has received significant attention from the market. Multiple insiders told reporters that some high-energy cities are also studying methods to pilot completed property sales on newly transferred land.

Before this, many regions across the country actively explored and promoted completed property sales.

Chen Wenjing introduced that in Hainan, commercial residential buildings constructed on land transferred after March 2020 have all implemented completed property sales, which has been in place for over five years, making it the first province to implement completed property sales.

According to incomplete monitoring by the China Index Academy, since the end of 2022, over 30 provinces (cities) across the country have issued policies related to completed property sales. For example, Hefei, Zhengzhou, and Changsha have clearly designated some projects for completed property sales pilots; Jingmen is the only city in Hubei Province to pilot completed property sales. In April this year, one of the city's first batch of pilot projects entered the market, with all shops sold out and over 80% of residential units signed, while another project is nearing completion with a subscription rate of nearly 90%.

In addition, many regions have introduced supporting policies for completed property sales. For example, several districts and counties in Ganzhou have extended the payment period for land transfer fees for completed property sales projects, several districts and counties in Jiujiang have provided deed tax subsidies for buyers of completed property sales projects, and multiple regions in Shandong have increased the provident fund loan limits for purchasing completed properties.

"From a long-term perspective, the completed property sales model is continuously advancing, and the trend cannot be ignored." Chi Tianhui, an analyst at Guojin Securities, believes that the real estate market has continued to decline in recent years, and after the small spring this year, real estate data has weakened again. The continuous bottoming of housing prices and the wait-and-see sentiment towards pre-sale properties (concerns about poor quality, rights protection, and unfinished projects) have constrained the release of demand, diverting a large amount of demand to the second-hand housing market.

He further stated that under the framework of the new development model for real estate, commercial housing needs to be fully marketized, advocating for what you see is what you get, and determining success by quality, thereby promoting industry transformation and upgrading and rebuilding the trust of homebuyers.

"From the perspective of residents, the sale of completed homes helps avoid project stagnation, reduces disputes arising from false advertising or information asymmetry, and lowers the cost of safeguarding rights. At the same time, residents do not need to make large upfront payments for completed homes while waiting for delivery, effectively reducing their financial pressure," said Xu Changjie.

From the perspective of industry development, he believes that the sale of completed homes will facilitate the industry's further transition towards being "product-driven," compelling real estate enterprises to prioritize the construction of "high-quality homes." It also reduces their reliance on pre-sale funds, curbs excessive expansion driven by high leverage, and mitigates systemic financial risks.

However, several analysts have pointed out that the sale of completed homes may also bring about other impacts, necessitating the implementation of supporting policies in pilot regions to offset these effects. It is anticipated that a comprehensive rollout will not occur in the short term.

In Chen Wenjing's view, under the model of completed home sales, there are still several issues that need to be addressed. Firstly, as the sales time node for completed homes is later than that for pre-sale homes, the sales payment collection cycle for real estate enterprises will be longer, posing a financial challenge for them. Secondly, the sale of completed homes will, to a certain extent, affect the scale of new home supply. For regions with relatively small housing inventories, local governments need to exercise precise control over the pace and intensity of implementation. Thirdly, the sale of completed homes will also increase the capital requirements for financial institutions.

"From a market perspective, it is recommended to prioritize pilot implementation of completed home sales in cities or regions with large housing inventories, while accelerating the improvement of real estate financing systems suitable for the completed home sales model, in order to gradually achieve a transition from pre-sale to completed home sales," said Chen Wenjing.