The city of Huizhou in Guangdong Province has introduced new measures to relieve the housing market, including the unprecedented policy of issuing “consumption vouchers for home purchases.” The announcement of “Huizhou to distribute 100 million yuan in housing consumption vouchers” has sparked discussion and debate. However, many parties have expressed skepticism, believing that this kind of “small-scale” discount will not have a substantial impact.
On April 30, the Huizhou Municipal Housing and Urban-Rural Development Bureau, jointly with the Municipal Finance Bureau, Taxation Bureau, Housing Provident Fund Center, and six other departments, issued a “Notice” to further optimize the city’s real estate regulation policies. The notice includes initiatives such as promoting home purchase consumption vouchers, preferential policies for housing provident funds, and encouraging “trade-in for new homes”.
For the first time, Huizhou has introduced the “purchase of homes with consumption vouchers” scheme, where individuals who purchase new homes and complete the online signing and deed tax payment procedures between May 1, 2024, and October 31, 2024, will receive electronic consumption vouchers, limited to the first 10,000 units with a total value of up to 100 million yuan.
The notice also stated that the “restriction on sales” policy has been further optimized, with restrictions on the transfer term of commodity housing (including new commodity housing and second-hand housing) being completely lifted. It also specifies that the maximum loan amount for families with two or more children purchasing self-occupied housing can be increased by 20%.
Since the beginning of the year, a significant policy in mainland China’s real estate sector has been the “trade-in for new homes”.
Yan Yuejin, Director of Research at E-House Research Institute, told China Times, “The key point is to digest existing housing inventory, which will help truly stimulate homebuyers to trade in for new homes.”
In a video program, financial media personality “Talking Finance in Idle Time” stated that against the backdrop of a sluggish real estate market in China, Huizhou’s policy initiatives reflect the urgent need for local market rescue efforts, attempting to stabilize the housing market through diverse means. However, compared to the fancy price reduction methods of other regions, the 10,000 yuan consumption voucher offered by Huizhou is not very impactful.
He remarked, “For small cities to make breakthroughs in this competition, they need more aggressive measures to attract homebuyers. These small-scale discounts might not even make a ripple and are unlikely to generate real effects.”
Numerous netizens have also expressed disdain for the housing purchase vouchers:
– Ling Ling Xiao Ping Guo: “Do I need a consumption voucher? I think I need money to buy a house!”
– Angry Uncle: “Doing the math, it’s just 10,000 yuan per unit. Do I really need your 10,000 yuan? Even with or without it, I still can’t afford it! No difference!”
– WULIANGJUN1472: “The authorities are really in a hurry.”
– Sui Xiao Wa: “There are too many surplus houses, they are not scarce commodities anymore.”
Huizhou, formerly Huizhou Prefecture, was comprised of 13 counties/cities. It became a municipality in 1988 along with Dongguan, Heyuan, Shanwei, and became independent from Huizhou, marking the creation of five new regional-level cities.
Starting from the 1990s, Huizhou’s electronic information industry has evolved from OEM manufacturing to climbing up the value chain, gradually forming an industrial cluster dominated by companies like Samsung and TCL.
Similar to Yanshao near Beijing and Kunshan near Shanghai, Huizhou also benefitted from its proximity to Shenzhen. The city saw a construction boom with tall buildings everywhere. Due to the high population and prices in Shenzhen, investors flocked to Huizhou, where the vast housing supply met the demand.
In September 2019, Samsung Group’s early-established factory in China, Huizhou Samsung Electronics Co., ceased production and pulled out due to cost and market changes. This move affected hundreds of small and medium-sized enterprises in Huizhou Zhongkai High-tech Industrial Development Zone that were part of Samsung’s upstream and downstream supply chain, leading to the near collapse of orders worth billions yuan. Coupled with economic downturns, the Huizhou property market faced a severe crisis.
With an oversupply of houses in Huizhou, a report by the Economic Daily in March 2022 revealed that Huizhou’s housing inventory ranked among the top five in the country. In a market where prices were falling, selling homes became increasingly challenging.
In early May last year, a bizarre incident circulated online. “A real estate agent, in order to sell a house, pretended to be in a romantic relationship with a girl he met online, promising to give her a house where he would cover the down payment, but the girl had to pay the monthly installments herself.”
In reality, the house the agent was trying to give away was a zero down payment property. In Huizhou, various price reduction methods such as zero down payment, free renovations, free parking spaces, and even free monthly payments were abundant.
The large housing inventory in Huizhou and the urgent need for its digestion reflect a microcosm of China’s overall real estate market. From a data perspective, the pressure of unsold housing is significant in China. According to data released by the National Bureau of Statistics of China, as of the end of March 2024, the national unsold area of commercial housing was 748.33 million square meters, a 15.6% increase year-on-year, with residential unsold areas rising by 23.9%.
Financial influencer “Principal Yang Talks Real Estate in Huizhou,” who has been in the real estate business in Huizhou for nine years, recently expressed, “There are too many houses in Huizhou, and the competition is fierce. There were too many early investors, but with nobody living in these houses, what’s the point? Without interest, the market will collapse sooner or later.”
He explained, “Currently, at least 90% of the housing projects in Huizhou are undergoing a major reshuffle, with prices falling too sharply. Some areas that are not attracting attention are seeing lower prices than small county towns, and the most critical issue is that these properties are not selling, which is the result of this major reshuffle.”
Guangdong financial media personality “Li Talks Real Estate” stated on April 29 that they speak truthfully as a real estate professional. They mentioned that the prices of second-hand homes in Huizhou have been continuously decreasing, with an increasing number of listings. The current transactions are all about second-hand homes, using price reductions to increase sales volumes, and the pace is too fast, exceeding what people can afford. The rapid drop in prices may lead to a collapse. The surge in the number of listed second-hand homes is causing distress to homeowners, coupled with declining prices.
They further explained that throughout April, there was a strong sense of wait-and-see in the real estate market, compounded by frequent thunderstorms recently, resulting in significant decreases in the number of property viewers and subscriptions. Looking at the current sales atmosphere and situation, it is projected that there won’t be a “Golden Week” for the Huizhou property market during the May Day holiday.
A real estate blogger and agent named “Brother Fang Observes Huizhou Real Estate,” who has lived in Huizhou for eleven years, released a video on April 29 advertising a property for sale.
He mentioned that the three-bedroom property in the central area of Dangshui, Huizhou, with an area of 113 square meters, is priced at around 1.2 million yuan. The property has been beautifully renovated, designed to be move-in ready and is located in the heart of Dangshui, Huizhou. It was once a luxurious development where people queued to draw lots. There is a large commercial complex downstairs, and the district government, library, and grand theater are all nearby, along with a 160,000 square meter city square and a park. It offers convenient living with complete facilities.
The property owner has never lived in the place and is reluctantly letting it go. The renovation costs incurred by the owner, along with the repaid bank loans, have resulted in a significant loss. “Even at its cheapest, this property used to cost around 13-14 thousand yuan per square meter, and it’s only 6-7 years old. It has now incurred losses of 800-900 thousand yuan.”
This rewrite and translation extends and elaborates on the original news article, providing further context and insights into the housing market situation in Huizhou.