Core Viewpoint - The article discusses the recent implementation of the "current housing sales" system in Xinyang, Henan Province, marking it as the first city in China to fully adopt this system, which aims to replace the long-standing pre-sale system in the real estate sector [1][3]. Summary by Sections Current Housing Sales System - Xinyang's new policy mandates that all newly developed residential properties in the central urban area must be sold as completed units, with counties encouraged to follow suit [1]. - The current housing sales system is seen as a potential way to restore buyer confidence, although its feasibility is questioned given the current liquidity issues in the real estate market [1]. Historical Context of Pre-sale System - The pre-sale system, which allows developers to sell properties before completion, was introduced in China in the early 1990s to address funding shortages in the real estate sector [3][4]. - This system has historically provided significant cash flow for developers, with "deposits and pre-sales" accounting for over 20% of funding sources for real estate companies, peaking above 40% in earlier years [4]. Recent Market Trends - Since 2023, there has been a noticeable shift towards current housing sales, with current sales accounting for approximately 30% of new housing transactions, while pre-sale transactions have declined [5][6]. - The central government has emphasized the need to reform the pre-sale system, with the Ministry of Housing and Urban-Rural Development advocating for a gradual transition to current sales [5][7]. Risks and Challenges - The article highlights concerns regarding the abrupt cancellation of the pre-sale system, which could exacerbate liquidity issues for developers and lead to increased risks in the market [9][10]. - Local governments have expressed caution about fully implementing the current sales system, citing potential economic disruptions and the need for a gradual approach to reform [10][11]. Recommendations for Transition - The proposed approach includes piloting current sales while maintaining strict regulations on pre-sale funds to ensure project financing [13][14]. - Financial support and reduced land prices are identified as critical measures to alleviate the financial burden of current sales, alongside improvements in the business environment [14][15]. Conclusion - The transition to a current housing sales system is seen as a necessary evolution in the real estate market, but it requires careful management to avoid destabilizing the industry [16].

Core Viewpoint - The article discusses the recent policy changes in Xinyang, Henan Province, promoting the sale of completed residential properties instead of pre-sales, marking a significant shift in China's real estate market towards a new development model [1][6]. Summary by Sections Policy Implementation - On May 13, Xinyang's Housing and Urban-Rural Development Bureau announced measures to strengthen the management of pre-sale housing, implementing a "new and old distinction" principle for promoting completed property sales in urban areas [1][6]. - New projects must reach a construction completion stage before applying for pre-sale permits, and all newly sold land must follow the completed sales model [6][8]. Market Context - The pre-sale system has been a product of rapid urbanization in China, but as the industry slows down, the drawbacks of this system have become apparent, prompting the exploration of completed sales as a new model [1][10]. - Over 30 provinces have introduced policies related to completed sales since the end of 2022, aiming to enhance buyer confidence by allowing them to see and inspect properties before purchase [1][11]. Financial Regulations - The new measures include strict conditions for pre-sale permits, requiring developers to have invested at least 25% of total construction costs or to have completed half of the project before applying [6][7]. - Pre-sale funds must be deposited into a regulated account before signing contracts, ensuring that funds are used specifically for project construction [7][12]. Market Impact - The shift to completed sales is expected to reduce risks for buyers, as they can assess the quality of the property firsthand, potentially leading to a focus on quality in construction and design by developers [8][10]. - However, the immediate impact on Xinyang's market may be limited, as many new projects are already in a completed sales state, and the market is still adjusting [8][12]. Industry Trends - The article highlights a broader trend towards reforming the pre-sale system, which has been in place for 30 years, as the industry transitions to a "stock era" where existing properties are prioritized over new developments [10][11]. - The implementation of completed sales is seen as a necessary step to address issues such as project delays and quality concerns that have arisen under the pre-sale model [10][11]. Future Considerations - The transition to completed sales will require careful management of supply and demand, particularly in areas with varying inventory levels, to avoid market imbalances [13][14]. - The coexistence of pre-sale and completed sales models is anticipated for the foreseeable future, allowing flexibility for developers and buyers [14].

Core Viewpoint - The implementation of a "new and old distinction" principle in promoting the sale of completed properties in Xinyang is a significant shift in China's real estate market, aiming to address the drawbacks of the pre-sale system and enhance buyer confidence [1][5][10]. Group 1: Policy Changes - The Xinyang Housing and Urban-Rural Development Bureau has introduced measures to strengthen the management of pre-sale housing, requiring new projects to reach a construction completion stage before applying for pre-sale permits [5][6]. - The new policy mandates that all newly sold land in the central urban area must adopt a completed property sales model, marking Xinyang as the first city to fully implement this approach [6][10]. Group 2: Market Impact - The shift to completed property sales is expected to reduce risks for buyers, ensuring that the quality of construction is visible and minimizing issues related to unfinished projects [6][10]. - Despite the policy changes, the immediate impact on Xinyang's real estate market may be limited due to existing inventory pressures and a slow market adjustment phase [7][11]. Group 3: Industry Trends - The transition from a pre-sale system, which has been in place for nearly 30 years, reflects the need for reform in the real estate sector as it moves into a "stock era" [8][10]. - The ongoing exploration of completed property sales is part of a broader trend to optimize the regulatory framework surrounding housing sales, with over 30 provinces implementing similar policies since late 2022 [10][11]. Group 4: Future Considerations - The future landscape of the real estate market is expected to feature a coexistence of both pre-sale and completed property sales, allowing for flexibility in response to market conditions [12]. - The successful implementation of completed property sales will require careful consideration of supporting policies, including financing and regulatory adjustments, to ensure a balanced market supply and demand [11][12].