The Role Of Real Estate Under The Goal Of "Common Prosperity": Housing, Security And Redistribution

After the continuous deleveraging and de investment, the real estate industry is accelerating the return to people's livelihood.

On August 17, the 10th meeting of the central financial and Economic Commission was held to study the issue of solid promotion of common prosperity, prevention and resolution of major financial risks and financial stability and development.

In the announcement of the meeting, only one content directly related to real estate, that is to improve the "housing supply and security system". However, as the most important bulk asset in the life of Chinese residents, the industry orientation and policy orientation of real estate play an important role in the realization of the goal of "common prosperity".

In recent years, the goal of "no speculation on housing" is to return to the residential property, which has been an important goal of China's real estate regulation policy. In the near future, the goal is further extended to protect people's livelihood and adjust income distribution. This can not only be seen as the deepening and landing of the connotation of "housing without speculation", but also determine the future direction of the industry to a large extent.

Behind this, two important policy lines have been extended. First, since the end of last year, real estate tax reform aimed at increasing the proportion of direct tax and regulating income distribution has been mentioned frequently; Second, the construction of housing security system including affordable rental housing is being raised to an unprecedented strategic height.

Return to people's livelihood

Real estate has rapidly become the main asset of Chinese families in the past 20 years. Since the launch of the housing reform in 1998, China's real estate market has developed rapidly, and the per capita living area has also improved significantly.

According to the data of the National Bureau of statistics, by 2018, the per capita housing construction area of urban residents will be 39 square meters, an increase of 32.3 square meters over 1978; The per capita housing construction area of rural residents is 47.3 square meters, an increase of 39.2 square meters over 1978.

This process is accompanied by a rapid rise in house prices. Since the new century, the real estate market has experienced at least five rising cycles. With the rise of house prices, investment and speculation have been on the rise for a time, and become an important force to promote the irrational warming of the market.

In fact, after 2014, China has already passed the balance point of real estate supply and demand, and the basis for the comprehensive rise of the real estate market has no longer existed. The regulatory authorities have also taken various measures to curb speculation and investment, but under the "education" of several market surges, this demand impulse has always existed.

At the end of 2016, the regulatory authorities proposed for the first time that "the house is for living, not for speculation" (i.e. "the house is not for speculation"), returning to the residential property of the house in terms of policy guidance. So far, the strength and scope of this round of regulation and control have been increasing, and the regulation cycle in the past five years is unprecedented, especially in the land and financial supply side. While deleveraging, the demand for investment and speculation has almost disappeared.

However, "it's not really a real" housing speculation. " On August 18, the head of a research institute under the Ministry of natural resources told 21st century economic reporter that there are still some problems to be solved if we talk about "common prosperity" on this basis.

He said that over the past few years, the focus of property market regulation policies has been on the traditional real estate development field, and the regulation of related fields such as second-hand housing, leasing and affordable housing still needs to be strengthened. Especially in the framework of "rent and purchase", there are still some shortcomings in the construction of rental housing (especially policy rental housing).

On the other hand, the structural imbalance between supply and demand still exists, which leads to the differentiation of residents' asset income.

The role of real estate in regulating income distribution can not be ignored. According to a set of data released by the central bank in 2020, the proportion of China's residents' housing assets in total household assets is 59.1%, which is 28.5 percentage points higher than that of American households. Housing has become the main asset of Chinese households.

Xu Xiaole, chief analyst of Shell Research Institute, told the 21st century economic report that real estate has brought about an increase in household assets, but also an uneven distribution. Based on the wealth appreciation effect of real estate, in the past, most families realized the accumulation and appreciation of family wealth by buying a house. However, under the condition of high housing prices, some low-income families can not obtain this part of assets because they can not afford to buy a house, which further increases the burden of expenditure. From this point of view, the phenomenon of uneven distribution is increasing.

Bai Wenxi, IPG's chief economist in China, also believes that in recent years, more and more resources such as education and medical care are attached to (purchased rather than rented) real estate, which will also lead to uneven distribution of social resources.

Xu Xiaole said that under the framework of the goal of "common prosperity", real estate will be more of a people's livelihood orientation of "ensuring basic living and improving living conditions".

Policy context

Since the end of last year, the people's livelihood color of property market regulation has gradually become prominent. There are two policy contexts worthy of attention, namely, the reform of real estate tax and the construction of housing security system.

On December 23, 2020, Liu Kun, Minister of finance, published an article "establishing a modern fiscal and taxation system" in people's daily, saying that the legislation and reform of real estate tax should be actively and steadily promoted in accordance with the principle of "legislation first, full authorization and step-by-step promotion". The article thinks that through the legislation and reform of real estate tax, the direct tax system can be improved, and the proportion of direct tax can be gradually increased, so as to achieve the function of regulating income distribution.

In 2021, "real estate tax" is frequently mentioned again. On March 24, Han Zheng, vice premier of the State Council, held a forum on fiscal and taxation work, proposing three major points for fiscal and tax policy research, one of which is to improve the regulation and control of the real estate market.

On May 6, Liu Kun published the article "establishing and improving a modern financial and taxation system conducive to high-quality development", stressing once again that it is necessary to actively and steadily promote the legislation and reform of real estate tax. On May 11, the Ministry of finance, the budget Working Committee of the Standing Committee of the National People's Congress, the Ministry of housing and urban rural development and the State Administration of Taxation held a forum on the pilot work of real estate tax reform in Beijing.

Different from the current "real estate tax", the real estate tax is not a single tax, but a tax system covering all aspects of real estate transactions and holdings. One of the purposes of the reform of real estate tax is to increase the tax on holding link, so as to adjust the income distribution. Most respondents believe that the real estate tax is expected to be promoted in the way of pilot first, and its launch is on the way.

The construction of housing security system is also the focus of recent policy. The meeting of the Political Bureau of the CPC Central Committee held on April 30 this year pointed out that the supply of affordable rental housing and housing with common property rights should be increased.

In June, the general office of the State Council issued the opinions on accelerating the development of indemnificatory rental housing, proposing to speed up the improvement of the housing security system with public rental housing, affordable rental housing and housing with common property rights as the main body, and clarified the basic system and supporting policies of affordable rental housing.

on_july_22_ , _han_zheng_presided_over_a_teleconference_on_accelerating_the_development_of_affordable_rental_housing_and_further_improving_the_regulation_and_control_of_the_real_estate_market_ , _emphasizing_that_the_net_inflow_of_population_into_the_city_should_be_the_focus_ , _the_main_responsibility_of_the_city_should_be_implemented_ , _and_the_development_of_affordable_rental_housing_should_be_accelerated_ ._

As a new housing category, indemnificatory rental housing mainly solves the housing difficulties of new citizens, young people and other groups that meet the requirements. It mainly focuses on small houses with a building area of no more than 70 square meters, and the rent is lower than that of rental housing in the same location and quality market. Recently, a number of cities have issued rental housing construction plans. According to the plan, a large number of such housing categories will be launched, the housing security system will be rapidly improved, and it is expected that the market supply structure will be greatly changed.

From the perspective of "common prosperity", there is still room for extension of real estate policy.

Xu Xiaole believes that in the future, real estate regulation will continue to adhere to "no speculation in housing", "three lines and four grades", real estate loan concentration management, strict inspection of illegal entry of operating loans into the real estate market, as well as control measures such as purchase restriction, loan restriction and sales restriction, so as to crack down on investment speculation and make the vast majority of families can afford to buy houses and live well by stabilizing house prices.

Bai Wenxi pointed out that inheritance tax and gift tax related to real estate may also usher in adjustment, and the tax on real estate leasing is expected to advance rapidly.