Hangzhou and Other Places Expand the Boundaries of Housing Provident Fund Usage, Real Estate Sector Rises, Xinhuangpu Leads the Gains [SMM Flash News]

SMM News on June 25:

Hangzhou has launched a pilot program allowing the direct payment of housing provident fund for down payments on home purchases; Xi'an permits the direct use of housing provident fund for down payments on newly built commercial housing; Jinan allows the use of housing provident fund to purchase affordable housing starting from June 24; Guangdong has implemented policies for cross-regional housing provident fund loans and withdrawals for home purchases in other regions, reasonably increasing the housing provident fund loan limits, supporting depositors in applying for individual housing provident fund loans while withdrawing housing provident fund for down payments on home purchases, and promoting the "trade-in" of old homes for new ones... Hangzhou and other places have expanded the scope of housing provident fund usage. The stimulus policy package has activated new momentum in housing consumption. The real estate sector saw a significant rally in the afternoon of June 25. By the close of trading on the 25th, the real estate development sector rose by 1.36%. Among individual stocks, Xinhuangpu rose by 8.01%, with Shibei B-share, Huili B-share, Chongqing Development, Phoenix Holdings, and China World Trade Center among the top gainers.

News Updates

[Li Qiang Presides Over the State Council Executive Meeting, Hearing Reports on Building a New Model for Real Estate Development and Advancing the Construction of High-Quality Housing] On June 13, according to CCTV News, Li Qiang presided over the State Council Executive Meeting, hearing reports on building a new model for real estate development and advancing the construction of high-quality housing. The meeting pointed out that building a new model for real estate development is of great significance for promoting the stable, healthy, and high-quality development of the real estate market. It is necessary to focus on the long term, adhere to the principle of seeking progress while maintaining stability, establishing foundations first before breaking new ground, and systematically establishing relevant basic institutions. It is crucial to steadily and effectively promote the construction of "high-quality housing," incorporating it into the urban renewal mechanism to strengthen work coordination and provide policy support in areas such as planning, land, finance, and banking. A comprehensive survey of the land already supplied and ongoing projects in the national real estate sector should be conducted to further optimize existing policies, enhance the systematic and effective implementation of policies, and adopt a multi-pronged approach to stabilize expectations, activate demand, optimize supply, and mitigate risks, thereby driving the real estate market to stabilize and recover with greater vigor.

[The 12th Plenary Session of the Standing Committee of the 14th National Committee of the Chinese People's Political Consultative Conference Holds a General Meeting, with Speeches Focused on "Further Deepening Economic System Reform and Advancing Chinese-style Modernization"] According to Xinhua News Agency, the 12th Plenary Session of the Standing Committee of the 14th National Committee of the Chinese People's Political Consultative Conference held a general meeting in the afternoon of the 24th, with 14 members of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference delivering speeches centered around "Further Deepening Economic System Reform and Advancing Chinese-style Modernization." Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Chairman of the National Committee of the Chinese People's Political Consultative Conference, attended the meeting. Cao Weixing, a member of the Standing Committee, delivered a speech on behalf of the Central Committee of the China Democratic League, proposing to promote a better integration of an efficient market and a proactive government, and to build a highly efficient, standardized, fair, competitive, and fully open national unified market. Xu Xiaolan, a member of the Standing Committee, suggested in her speech to improve the long-term mechanism and encourage, support, and guide private economic organizations to participate in national technological breakthroughs. Liu Zhongfan, a member of the Standing Committee, speaking on behalf of the Central Committee of the Jiu San Society, suggested improving the mechanism for the commercialization of scientific and technological achievements, promoting the integration of science and technology with the economy, and accelerating the formation of new quality productive forces. Zhang Lianqi, a member of the Standing Committee, suggested in his speech to expand domestic demand by focusing on solving urgent, difficult, and concerning issues in the people's livelihood, and promoting high-quality development through "investing in people." Yao Aixing, a member of the Standing Committee, speaking on behalf of the Central Committee of the China Association for Promoting Democracy, suggested deepening the reform of the fiscal and taxation system and accelerating the formation of a central-local fiscal relationship with clear powers and responsibilities, coordinated financial resources, and balanced regional development. Yi Gang, a member of the Standing Committee, proposed in his speech to deepen the reform of the financial system, strengthen financial support for the private economy and technological innovation, and provide high-quality financial supply for green and low-carbon development. Li Shijie, a member of the Standing Committee, speaking on behalf of the Central Committee of the China National Democratic Construction Association, suggested improving the diversified investment growth mechanism, supporting technological innovation, and accelerating the cultivation of future industries. Yan Ying, a member of the Standing Committee, suggested in her speech to promote the efficient allocation of computing resources and facilitate the coordinated development of industry-specific large models and general-purpose large models. Li Huidong, a member of the Standing Committee, speaking on behalf of the Central Committee of the Revolutionary Committee of the Chinese Kuomintang, proposed deepening the reform and innovation of agricultural technology extension, achieving the organic integration of technological innovation with industrial development, and the effective connection of technical services with industrial demands. Wang Xiaodong, a member of the Standing Committee, proposed in his speech to better leverage the role of county towns in connecting cities and driving rural development, and promote the integrated development of urban and rural areas. Fang Guanghua, a member of the Standing Committee, proposed that the government, enterprises, universities, and other parties should work together to promote high-quality and full employment for university graduates. Feng Zhenglin, a member of the Standing Committee, suggested in his speech to accelerate the construction of a new model for real estate development, serving new-type urbanization and common prosperity. Li Yao, a member of the Standing Committee, suggested strengthening investment and financing support, expanding new forms of service trade, and boosting the high-quality development of the joint construction of the "Belt and Road." Hong Huimin, a member of the Standing Committee, suggested in his speech to actively respond and take proactive measures to promote the steady improvement in the quality of foreign investment and trade.

[National Bureau of Statistics (NBS): Continuously promoting urban renewal and renovation of dilapidated houses, and increasing the supply of "good housing"] On June 16, Fu Linghui, spokesperson of the NBS and director of the Department of Comprehensive Statistics of the National Economy, stated at a press conference held by the State Council Information Office that in the next stage, it is necessary to earnestly implement the decisions and arrangements of the Party Central Committee and the State Council, actively adapt to the reality of significant changes in the supply-demand relationship of the real estate market, continuously promote urban renewal and renovation of dilapidated houses, increase the construction and supply of "good housing," facilitate the release of rigid and improved housing demands, actively construct a new model for real estate development, and promote the steady and healthy development of the real estate market. Fu Linghui stated that since the beginning of this year, with the accelerated implementation of various policies to stabilize the real estate market, the market has continued to move towards halting the decline and stabilizing. From the situation in May, the real estate market generally operated steadily. The YoY decline in housing prices in 70 large and medium-sized cities continued to narrow, and the inventory of commercial housing continued to decrease. From the perspective of market transactions, under the influence of various policies aimed at stabilizing the real estate market, real estate sales remained generally stable. From January to May, the sales area and sales volume of newly-built commercial housing decreased by 2.9% and 3.8% YoY respectively, basically flat compared to January-April. Market transactions in some first-tier and second-tier cities were relatively active, with the sales area and sales volume of commercial housing maintaining growth. From the perspective of market prices, the YoY decline in newly-built commercial residential housing continued to narrow. From the perspective of commercial housing inventory, the area of commercial housing pending sale in May decreased by 7.15 million m² compared to month-end April, marking a decrease for three consecutive months. Fu Linghui emphasized that, overall, the policies aimed at promoting the stabilization and recovery of the real estate market continued to show effectiveness, and the real estate market generally operated steadily in May. However, it should be noted that the real estate market is still in the process of adjustment, market confidence needs to be continuously restored, and the supply-demand relationship in the market still needs improvement. Continuous efforts are required to promote the stabilization and recovery of the real estate market.

China Construction News recently reported that the National Bureau of Statistics (NBS) recently released data on changes in the selling prices of commercial residential housing in 70 large and medium-sized cities. The data showed that in May, the real estate market generally operated steadily, the YoY decline in housing prices in 70 large and medium-sized cities continued to narrow, and the inventory of commercial housing continued to decrease. The data also indicated that the current real estate market is still in the process of adjustment, market confidence is still being restored, and the supply-demand relationship in the market still needs improvement. Continuous efforts are required to promote the stabilization and recovery of the real estate market. Since the beginning of this year, with the accelerated implementation of various policies aimed at stabilizing the real estate market, the real estate market has continued to move towards stabilization and recovery. In the long run, as China's urbanization process continues to advance, there is still relatively broad space for the real estate market, with good development prospects. We should have confidence in the overall stable and healthy development of the real estate market. With the further optimization and coordination of relevant central fiscal, taxation, and financial policies, as well as the implementation of precise policies tailored to local conditions across regions, the real estate market will further consolidate its stable trend.

[Hangzhou: Housing Provident Fund Can Be Directly Used for Down Payment on Home Purchases]According to a June 23rd announcement from "Hangzhou Release," in order to alleviate the pressure on housing provident fund contributors to pay the down payment for home purchases, the Hangzhou Housing Provident Fund Management Center has launched a service allowing the direct use of housing provident funds for down payments on newly-built commercial housing purchases in Hangzhou. The entire process supports online handling. The online handling function for second-hand housing is currently under development and will be launched soon.

[Guangdong: Promoting "Trade-in" for Housing and Accelerating the "Trade-in" of Cars, Home Appliances, Home Furnishings, E-bikes, Mobile Phones, and Digital Products]The General Office of the People's Government of Guangdong Province issued the "Guangdong Province Work Plan for Promoting Sustained Economic Improvement and Strengthening the Domestic Market."It mentioned that local governments are encouraged to provide housing purchase subsidies, consumption vouchers, and other measures based on actual conditions to enhance support for first-time homebuyers, families with multiple children, families supporting elderly parents, and rural migrants. Policies such as cross-regional housing provident fund loans and cross-regional housing provident fund withdrawals for home purchases should be implemented, with reasonable increases in housing provident fund loan limits. Depositors are supported in both withdrawing housing provident funds to pay for down payments and applying for individual housing provident fund loans. The "trade-in" policy for housing should be promoted, along with accelerating cross-bank "mortgage transfer" for second-hand homes. Efforts should be expedited to facilitate trade-ins for cars, home appliances, home furnishings, e-bikes, and mobile electronics, further optimizing workflows, improving recycling channels, and accelerating the settlement of trade-in funds. In line with national directives, the trade-in policy should be expanded to cover service consumption. Guangzhou has implemented a policy allowing applicants who "have failed in the lottery for an extended period" to directly obtain license plates, significantly easing restrictive measures on car purchases and increasing car purchase quotas. Shenzhen has optimized the lottery rules for regular incremental car purchase quotas to better meet the car purchase needs of those who "have failed in the lottery for an extended period."

[Jinan: Provident Fund Can Now Be Used to Purchase Affordable Housing]On June 24, the Jinan Housing Provident Fund Center issued the "Notice on Supporting Depositors in Purchasing Affordable Housing," explicitly stating that housing provident fund depositors purchasing affordable housing may withdraw funds from their personal accounts to pay for down payments while also applying for housing provident fund loans, with a minimum down payment ratio of 15%. The notice took effect immediately upon issuance.

[Changsha Adjusts Housing Provident Fund Policies: Relaxing Loan Conditions and Increasing Loan Limits]On June 20, the Changsha Housing Provident Fund Management Committee adjusted housing provident fund policies, changing the loan condition from "12 consecutive months of normal contributions" to "6 consecutive months of normal contributions." The rule that "neither the employee nor their spouse has more than two housing provident fund loan records" was abolished, as was the provision that "if an employee applies for a housing provident fund loan within two years of divorce and the marital property remains under the name of either or both former spouses, it will be counted toward the employee’s family housing quota, regardless of allocation to the applicant." Loan limits were increased. For families with two or three children purchasing their first or second self-use home (newly built commercial housing) in the city, the maximum loan limit was raised by 20% and 30%, respectively, based on the current maximum. If an employee’s family also qualifies for loan limit increases under youth talent or high-level talent policies, the highest applicable increase will be applied without cumulative calculations. From the policy’s effective date, families purchasing their first self-use home (newly built commercial housing) in the city may apply for both housing provident fund withdrawals and loans. Single employees and cross-regional depositors purchasing their first or second self-use home may also apply for housing provident fund loans. Employees applying for housing provident fund withdrawals to purchase, construct, renovate, or overhaul their first or second self-owned residence will no longer be subject to the restriction that "those who have withdrawn housing provident funds more than twice for such purposes cannot reapply."

[Xi'an: Allows Direct Use of Housing Provident Fund for New Home Down Payments]Multiple departments including Xi'an Municipal Housing and Urban-Rural Development Bureau jointly issued the "Several Measures to Promote Stable and Healthy Development of Xi'an's Real Estate Market." The measures include deepening financial support for real estate by implementing policies like reduced down payments and lower interest rates. The scope of the "white list" for developer financing will be expanded, loan approval processes optimized, and increased financing support provided for commercial projects. Housing provident fund support will be enhanced, allowing direct use of the fund for down payments on newly built commodity housing. The intercity housing provident fund loan program will be extended to the Guanzhong Plain urban cluster and provincially registered employees.

[Zibo, Shandong: Raises Housing Provident Fund Loan Limits to 1 Million Yuan for Couples]On June 18, Zibo Municipal Housing Provident Fund Management Center issued the "Notice on Optimizing Partial Housing Provident Fund Loan Policies." For first-time and second-home buyers applying for housing provident fund loans, couples with continuous normal contributions (including joint loans) will see their maximum loan limit increased from 800,000 to 1 million yuan. Single contributors will have their limit raised from 600,000 to 700,000 yuan. Multi-child families purchasing their first or second self-owned residence can now receive a 30% loan limit increase (previously 20%). The notice specifies that multi-child families buying homes, purchasing high-grade residences (including prefabricated homes), or buying completed properties can stack these preferential policies, with a combined maximum loan limit of 1.6 million yuan. High-level talent maintains the original policy without stacking, with an actual maximum loan limit of 2 million yuan.

[Quzhou Introduces New Property Policies, Implements Subsidies for Multi-child Families' Upgrade Purchases]On June 16, Quzhou Municipal Housing and Urban-Rural Development Bureau, Finance Bureau, and Health Commission jointly issued the "Notice on Further Measures to Promote Stable and Healthy Development of the Real Estate Market," introducing subsidies for multi-child families upgrading their housing. From June 20, 2025, multi-child families purchasing newly built commodity housing in urban areas (projects obtaining pre-sale permits for the first time since 2021) can receive upgrade subsidies. Two-child families purchasing properties with 100 m² or larger registered areas in the "Zhejiang Province Commercial Housing Sales Contracts" can apply for 80,000 yuan subsidies, while three-child families purchasing 120 m² or larger properties can receive 200,000 yuan subsidies. Subsidies are issued in the form of housing vouchers, which can be used in combination with other types of housing vouchers, and the trial period is one year. Specific implementation details will be formulated separately by the Municipal Housing and Urban-Rural Development Bureau, the Municipal Finance Bureau, and the Municipal Health Commission.

[Guangzhou: Plans to Optimize Real Estate Policies, Fully Lifting Purchase, Sales, and Price Restrictions, and Reducing Loan Down Payment Ratios and Interest Rates] On June 13th, the "Guangzhou Municipal Special Action Plan for Boosting Consumption (Draft for Public Comment)" was opened for public feedback. It mentioned that consumption restrictions will be reduced in an orderly manner. Real estate policies will be optimized by fully lifting purchase, sales, and price restrictions, and reducing loan down payment ratios and interest rates to better meet housing consumption needs. Solid progress will be made in the renovation of urban villages and old residential communities. In 2025, it is planned to initiate the renovation of over 150 old residential communities, replace over 9,000 old residential elevators, and complete fixed asset investment of 100 billion yuan in urban village renovation. The use of special loans to purchase existing commercial housing as resettlement housing will be promoted. The policy on the use of housing provident funds will be continuously optimized to support depositors in applying for individual housing loans from housing provident funds while withdrawing housing provident funds to pay for down payments on home purchases, and measures to optimize rental withdrawal policies will be further improved.

Voices from Various Parties

CRIC Real Estate Research stated that in the first half of 2025, the real estate market, under continuous policy regulation, is gradually moving towards stability and health. Since the second quarter, the pace of policy implementation has significantly accelerated, helping the real estate market to transition towards a new and better landscape. The active promotion of policies by both central and local governments in the first half of the year has provided strong guarantees for the stability and healthy development of the real estate market. It is expected that efforts to stabilize the market will be further intensified in the second half of the year. With the full implementation of urban renewal and land acquisition and storage policies, inventory pressure on both the supply and demand sides of the industry will be further alleviated. The real estate market is expected to achieve a new dynamic balance in supply and demand more quickly, and the industry will accelerate towards high-quality development.

CITIC Securities' research report stated that since the beginning of this year, the momentum of consumption recovery has been evident, with manufacturing and infrastructure investment maintaining stable growth, and exports showing strong resilience. All three engines of the economy have demonstrated positive changes, and economic growth in the second quarter is expected to exceed 5%, laying a solid foundation for achieving the annual target. Looking ahead to the second half of the year, the new model of real estate development will more effectively alleviate structural supply-demand mismatches, and policies to stabilize foreign trade will continue to exert their effects. Against the backdrop of declining global economic momentum and rising uncertainties in geopolitics and trade frictions, more certainty will be injected into China's economy.

Morgan Stanley released a research report stating that after Hong Kong's housing prices fell by 30% from their peak, they may be entering an upward cycle that could last four to five years. Analysts including Ronald Kamden wrote in a report that factors supporting the housing market include the abolition of stamp duty, lower mortgage interest rates due to a decline in the Hong Kong Interbank Offered Rate (Hibor), and increased demand from mainland buyers and immigrants. The Centaline City Leading Index (CCL) has fallen by 30% since August 2021, with housing affordability pulling back to the level of 2011. It is expected that home prices will rise by 2% in H2 2025. We are bullish on Sun Hung Kai Properties (overweight), Henderson Land Development (overweight), and Kerry Properties (equal-weight), and bearish on New World Development and Wharf Real Estate Investment Company.