Middle Finger Research Institute: After the Spring Festival, the seasonal recovery of housing rental demand, the rental decline in key cities has narrowed significantly.

On March 7th, the China Real Estate Industry Research Institute stated that in February 2024, the demand for rental housing started to recover seasonally after the Spring Festival, with a significant narrowing of the decline in rents in key cities. The average rent for residential properties in 50 cities was 36.5 yuan per square meter per month, a decrease of 0.05% compared to the previous month and a decrease of 0.69% year-on-year. Data on the month-on-month changes in rents for branded long-term rental apartments in key cities showed that out of 30 cities, 14 saw an increase, 15 saw a decrease, and 1 remained unchanged. In February, a total of 34 residential land transactions were completed in 22 key cities, with a total planned construction area of 2.611 million square meters, with no transactions involving rental land. According to the China Real Estate Industry Research Institute, in February 2024, the total number of units opened by the top 30 centralized long-term rental apartment companies reached 1.102 million units, remaining relatively stable compared to January. Among them, the top 5 companies had a total of 516,000 units opened, accounting for 46.8% of the total size of the top 30 companies. In February 2024, the threshold for entry into the top 30 in terms of units opened remained at 11,000 units, consistent with January. In terms of classification, among the top 30 units opened, there were 14 housing enterprises engaged in rental housing, 6 local state-owned enterprises, 5 entrepreneurial companies, 3 hotel companies, 1 intermediary company, and 1 financial company, with no changes in the type structure from January. Data source: China Index Data CREIS Rental Edition According to the China Real Estate Industry Research Institute, in February 2024, the total number of units managed by the top 30 centralized long-term rental apartment companies reached 1.639 million units, an increase of 0.3 million units compared to January. Among them, the top 5 companies had a total of 720,000 units managed, accounting for 43.9% of the total size of the top 30 companies. In February 2024, the threshold for entry into the top 30 in terms of units managed was 17,778 units, consistent with January. In terms of classification, among the top 30 units managed, there were 11 housing enterprises engaged in rental housing, 9 local state-owned enterprises, 6 entrepreneurial companies, 3 hotel companies, and 1 intermediary company, with the same companies as in January. Data source: China Index Data CREIS Rental Edition In terms of construction and operation, due to the influence of the Spring Festival holiday, there were fewer opening activities for long-term rental apartment projects in February. Specifically, before the festival, Borgward Guan... --- I have truncated the translation as it reached the character limit. If you would like me to complete the translation, please let me know.Support policies such as business matching loans and tax incentives.On February 27, the Ministry of Housing and Urban-Rural Development issued a notice regarding the compilation of housing development planning and annual plans, proposing that provinces and cities should primarily ensure the rigid housing needs of wage earners with government support, and primarily meet the diversified improvement housing needs of residents with market support. They should scientifically compile annual plans for housing development in 2024 and 2025, and specify the scale, structure, and location of various types of housing and land supply for the year, and calculate the reasonable financing demand for real estate projects. Affordable housing needs to further specify the supply quantity and unit structure. Real estate market stability and healthy development, housing security waiting time, etc., should be included in targeted management. Table: Guidelines and support policies for the housing rental market issued by the central government in February 2024 Source: China Index Research Institute In terms of policy cultivation, Nanjing issued the "Implementation Measures for Points-based Urban Household Registration in Nanjing," further relaxing the application conditions for points-based household registration, increasing the weight of residence and social security points, and adding rental housing points. Each month of the rental period earns 0.5 points, with a cumulative maximum of 30 points. Guangzhou is intensifying its support for public welfare projects related to the well-being of the masses, such as affordable rental housing, community elderly care and childcare projects, all of which can apply for exemption from urban infrastructure supporting fees. In terms of supply, Hainan Province adjusted the scope of collective operating construction land entering the market, clarifying that rural collective operating construction land can be used for affordable rental housing, as well as for old-age care, education, scientific research, medical health, culture, sports, etc., but not for the construction of market-oriented commercial housing or affordable housing. In terms of provident fund support and rental subsidies, Zhangzhou has put forward specific implementation rules for rental subsidies in terms of subsidy objects and standards, application process, subsidy issuance, etc. The subsidy standard amount is determined by the formula "Monthly rental subsidy amount = secured housing area x per square meter rental subsidy standard x family per capita annual disposable income subsidy coefficient." Shaoxing further increased the standard for renting housing provident fund withdrawals, increasing the withdrawal amount from 1,500 yuan/month/person to 2,000 yuan/month/person. Daqing increased the standard for rental subsidies for housing security families by increasing the subsidy amount through adding 5 square meters per household and raising the corresponding subsidy ratio. In terms of market norms and management, Fuzhou has specific requirements regarding daylighting standards, public service facilities, prefabricated buildings, green land ratio, parking space standards, etc., in order to standardize the construction of affordable housing. Guangzhou has detailed the applicability scope of credit management for entities in the housing rental industry, division of responsibilities, scope of credit information, and acquisition methods. Beijing has specific requirements for determining rental prices, rental record keeping, rental adjustments, etc., with an annual adjustment rate not exceeding 5%. In addition, Beijing specifically includes housing rent in its supervision, requiring enterprises that collect more than 3 months' rent at a time to deposit the excess rent into a dedicated third-party account. Table: Guidelines and support policies for the housing rental market issued by local governments in February 2024 Source: China Index Research Institute According to the National Bureau of Statistics' "Statistical Bulletin on National Economic and Social Development in 2023," 213,000 affordable rental housing units were started and set up nationwide in 2023. Combined with the previous target of 204,000 units announced by the Ministry of Housing and Urban-Rural Development, the completion rate of the target was 104%. Jiangxi Province: In 2023, a total of 167,200 units of affordable rental housing were started (set up) in the province, ranking third in the country, providing housing for nearly 110,000 new urban residents and young people. Guangdong Province: Guangdong plans to add not less than 180,000 units of affordable rental housing for construction and issuance of public rental housing subsidies to not less than 40,000 households in 2024. Hunan Province: In 2024, the plan is to start the construction of 40,000 units of affordable rental housing and start the renovation of 2,000 old urban neighborhoods. Gansu Province: In 2024, Gansu Province will vigorously promote the development of affordable rental housing, focusing on the renovation and transformation of existing housing, converting idle housing and apartments of enterprises and institutions into affordable rental housing, and setting up a target to build 23,000 units of affordable rental housing. Hebei Province: In 2024, the plan is to add more than 20,000 units of affordable rental housing and provide rental subsidies to 23,700 households. Hefei: A total of 12,000 units of affordable rental housing have been planned for construction in 2023. Nanchang: In 2023, the city's task of developing affordable rental housing was 16,650 units, with the actual construction of 16,805 units in 2023, exceeding the annual plan. In 2024, Nanchang plans to build 17,000 units of affordable rental housing. Qingdao: In 2024, the plan is to build 15,000 units of affordable rental housing. Zhengzhou: In 2024, the plan is to build 15,000 units of affordable rental housing and 20,000 units of talent apartments, and distribute 20,000 units of talent apartments. Wenzhou: In 2024, the urban area of Wenzhou plans to build 11,755 units of affordable rental housing. Jinhua: In 2024, the plan is to build more than 32,000 units of affordable rental housing and provide rental subsidies to 14,900 households. In February 2024, as the Spring Festival holiday ended, the seasonal recovery of housing rental demand began, and the decline in rents in key cities narrowed significantly. According to the China Index 50-City Residential Rental Price Index, the average rent for residential housing in 50 cities in February was 36.5 yuan/square meter/month, a 0.05% decrease from the previous month, with a decrease of 0.29 percentage points narrower than the previous month. It was a 0.69% decrease compared to the same period last year, widening by 0.32 percentage points compared to the previous month. Chart: Average residential rent and month-on-month changes in 50 cities from July 2021 to February 2024 Data Source: China Index Data CREISRental Edition In February 2024, the combined effect of holiday travel demand and the return of migrant workers after the end of the Spring Festival holiday drove up housing rental demand, resulting in a noticeable increase in the number of cities with rising rents. In February 2024, 17 cities saw a month-on-month increase in average rent, an increase of 14 cities compared to January. Specifically, Beihai had the largest increase, at 1.35%; Sanya increased by 0.40%; Urumqi, Shijiazhuang, and 5 other cities saw increases in the range of 0.1%-0.3%; 10 cities including Shenyang and Changsha saw increases in the range ofWithin 0.1%. In February, the average residential rent in Guangzhou and Huizhou remained unchanged from January.In February 2024, the number of cities with a decrease in average residential rent on a month-on-month basis was 31, a decrease of 15 compared to January. Specifically, Wenzhou had the largest decrease at 0.52%; cities like Xuzhou and Jinan had a decrease in the range of 0.3%-0.4%; cities like Fuzhou and Changzhou had a decrease in the range of 0.1% to 0.3%; and cities like Yinchuan and Nanchang had a decrease of less than 0.1%. Data source: China Index Research Institute (CREIS) - Rental Edition In February 2024, a total of 34 residential land transactions were conducted in the key 22 cities, with no rental land transactions involved. The total planned construction area for the residential land transactions in the key 22 cities was approximately 2.611 million square meters. Beijing had the largest transaction volume at around 849,000 square meters, leading the 22 cities; cities like Hangzhou, Tianjin, and Shenzhen had transaction volumes in the range of 200,000 to 500,000 square meters; cities like Guangzhou, Fuzhou, Hefei, and Chengdu had transaction volumes in the range of 100,000 to 200,000 square meters; and cities like Jinan, Chongqing, Shenyang, Zhengzhou, and Changchun had transaction volumes below 100,000 square meters. Data source: China Index Research Institute (CREIS) - Rental Edition