On October 30, the Xi'an Municipal Housing and Urban-Rural Development Bureau and other three departments jointly issued the "Implementation Opinions on the Implementation of the "Notice on Improving the Commercial Housing Sales System", which will be implemented from now on. Xi'an has become the 15th city in the country and the first in the northwest to implement the central government's "8·28" commercial housing sales system reform rules, following Beijing, Shanghai, Guangzhou, Shenzhen and Wuhan, Tianjin, Hangzhou, Suzhou, Chengdu and other cities.

1. The bottom lines are all aligned: the pre-sale of new land parcels must cap the main structure, fully monitor the entire process of pre-sale funds, give priority to existing home sales for new land parcels, and close the funding loop of the sponsoring bank system. Xi'an has not relaxed any of the four bottom lines.

2. Three parameters fall in the national median: First, the deposit station is at the highest level. The 15 cities are divided into three levels: 1% for Beijing, 3% for Shanghai, Shenzhen, and Suzhou, and 5% for the other cities and Xi'an. The 5% level increases the hesitation cost and also symmetrically amplifies delivery constraints. Second, interest-free arrangements are also provided for land payment in installments, and the remaining balance can be paid off in up to two years. Xi'an stipulates that 50% of the first installment should be paid within six months, and the balance should be paid within one year. It can be extended for up to two years upon approval, and no interest will be charged for on-time payment. This is consistent with cities such as Beijing, Hangzhou, and Chengdu that allow the balance to be paid in two years and interest-free. At the same time, the first installment window is relaxed to six months, which is six times the mainstream "30 days". Third, the transition period ends at the end of 2027, and is extended to the end of 2028 for Chengdu, Wuhan, Hangzhou, and Ningbo. There is no unified deadline for Hefei. In the next year, the main circulation of new houses in Xi'an will still be off-plan houses under the "old rules".

3. Innovation lies in the process: During the completion process, Xi'an's characteristics allow real estate companies to draw up phased plans and guide the completion of the smallest units in sequence; the building is divided into two stages: underground and above ground based on the positive and negative zero points; the full decoration project is handled in stages according to rough and decoration. Wuhan has a similar arrangement, Hangzhou only has two steps for full decoration, and Tianjin and Suzhou do not have such facilities. Under the dual constraints of capped pre-sales and mortgage loans after completion, the payment collection cycle of real estate companies has been lengthened by one and a half to two years. The most pragmatic arrangement for hedging against the new regulations is to turn the completion of the project into a "cash flow node that can be cashed in stages."

4. Market impact: In the short term, the main supply of new houses is still the transitional stock projects and new capped pre-sale projects. Existing houses are given priority, but the short-term market share is limited, and the market is still mainly digesting the stock. In the medium term, capped pre-sales and post-mortgage lending will lengthen the repayment cycle, drive the supply pace back, and promote the passive removal of existing inventory. We need to be wary of the local mismatch caused by the concentrated expiration of the transition period in 2027 and the tight new supply.

5. Two things remain to be seen: First, the capping determination power will be transferred to the jurisdiction, and whether the standards of various districts and counties can be unified; second, the pre-sale fund supervision measures and household mortgage registration methods have not yet been issued.

Overall, Xi'an's detailed rules strictly implement the bottom line requirements of the central government on capped pre-sales, full supervision of funds, etc. At the same time, clear and detailed regulations are made based on local realities in practical aspects such as transitional project arrangements, excess fund withdrawals, and land payment installments. The policy takes into account the smooth transition of existing projects and the underlying reconstruction of incremental rules, and has certain reference value for the subsequent introduction of detailed rules by central and western cities. (Li Li, General Manager of Xi’an Branch of China Index Research Institute)

Editor in charge: Li Xia