how government subsidized housing program for low-incomed people will impact

NYboy

China’s State Council held a meeting on November 5, which introduced 10 measures to further expand domestic demand and stimulate economic growth. The first one is to accelerate housing development for low-income groups that cannot afford other homes. Specifically, governments plan to give more support to build low-rent housing, to reconstruct shantytowns, and to expand experimental programs of dilapidated housing rebuilding in rural areas.
The first measure is to accelerate housing development for low-income groups that cannot afford other homes, showing governments have a strong expectation that such development would shore up Chinese economy. (Housing for low-income groups that cannot afford to buy their own homes includes low-rent housing, affordable housing, price-limited housing, and even mid/low-priced or mid/small-sized residential properties.) Response by local governments should be the key, as potential investment could be primarily made by local governments. How can local governments raise money? How can they benefit from building housing for low-income groups? We believe the policy has limited short-term effects as it aims long-term development, and minor impacts on property market, but could help to accelerate urbanization process.
Ø         Stepping up efforts on building low-rent housing is a right goal, but has limited effects in the short term. Local governments have to raise money by bond issuance and bank loans. They prefer to invest in infrastructure, as the move can attract private investment, prop up economy and increase their tax revenue. In comparison, building low-rent housing can yield little returns and needs to be subsidized. Local governments are unlikely to build low-rent housing for a long time, unless their tax revenue sources become sustainable. Overall, we believe such high-profile gesture usually end up with small-scale actions. For example, China began to build more low-rent housing in early 2008, but such fiscal budget is just Rmb6.8bn, or less than 2% of fiscal revenue. Indeed, it is fair the percentage rises to 5~10%.
Ø         The latest policy has limited impacts on property markets. Policy makers now plan to build more low-rent housing instead of affordable housing, leaving few negative impacts on property markets. Such a plan can fuel domestic demand and stabilize property market. On the contrary, if governments step up efforts on building affordable housing and price-limited housing, the negative impacts on property markets would be significant.
Ø         The policy helps to accelerate urbanization process. In addition, shantytown reconstruction can fuel demand for residential properties, while dilapidated housing rebuilding in rural areas helps to accelerate China’s urbanization process. Overall, the latest policy is both positive and negative to property markets, but impacts should be limited in the short term.
Ø         Investment strategy reiterated: The worst time has yet to come and property sector is unlikely to turn around. Investors are still advised to buy industry leaders on dips and adopt a range-bound trading strategy.
 
一是加快建设保障性安居工程。加大对廉租住房建设支持力度，加快棚户区改造，实施游牧民定居工程，扩大农村危房改造试点。
大家好，十大政策第一条就是要加大保障性安居工程，体现政府在通过这部分拉动经济期望很高，保障性住房主要指廉租房、经济适用房、限价房甚至于中低价、中小户型商品房都可以涵盖在内，这部分投资主要通过地方政府实施，因此地方政府怎样响应是很重要的问题？其一，地方政府钱从哪儿里来？其二地方政府利益在哪儿？我们认为这是一个长期的政策，短期效果有限；对商品房市场影响有限；有利于城市化进程的加快。
Ø         加大廉租房建设方向是对的，但短期效果有限：就资金来源，基本上可以说要通过发债和银行贷款，而地方政府各方面的投资都很大，就其意向来看，更希望投在基础设施上，进而可以招商引资，拉动经济和地方政府税收，做廉租房投入很大，但没有收益，每年还要补贴，也就说建的越多，负担越大，只有地方政府税收来源持续以后才可能长久投入，比如征收物业税以后，总体感觉，这部分是雷声大雨点小，08年初国家加大廉租房建设，可中央只预算68亿作廉租房，占比不到政府财政收入的2%，其实国家可以提高到5%~10%都是合理的；
Ø         对商品房市场的影响有限：由于政府提出的是加大廉租房而非经济适用房建设力度，也就避免了与商品房市场直接冲突的结果，既可以通过建设廉租房拉动内需，又可以维持商品房市场的稳定，这是政策妥协的结果，如果政府加大廉租房和限价商品房建设，那对商品房地产市场的冲击将是巨大的；
Ø         有利于城市化进程的加快：除了加大廉租房建设之外，加快棚户区改造可以促进拉动商品房需求；实施游牧民定居和扩大农村危房改造有利于加快城市化进程，所以综合起来，这条政策的总体思路有两个，一是通过廉租房建设拉动需求，促进社会稳定；二是通过城市化进程加快促进经济增长；总的来看对房地产行业是拉动作用，对商品房市场有正负两方面影响，但短期内影响有限；
Ø         维持地产板块投资策略：市场最差的时期还未到来，地产板块难以出现反转，维持地产板块逢低吸纳行业龙头、波段性操作的投资策略。