Ministry: Second-hand home sales exceed 50% of total, signaling era of existing housing stock

On September 18, the State Council Information Office held a press conference under the "Fifteen-Five: A Strong Start" series, announcing the implementation of three foundational systems for the real estate sector. The core of these systems is to target individual projects, promoting both stable operations and healthy development across the real estate industry.

This signals a clear direction: future real estate development will be anchored by a project company system, building a new development model. Enterprises will be required not only to "build good houses" but also to "manage good houses," driving the industry toward aligning housing supply with population, land supply with housing, and capital supply with housing, thereby achieving a rational allocation of the four key elements: people, housing, land, and capital.

Understanding the Shift: The Market's Underlying Logic Has Fundamentally Changed

To grasp this transformation, one must first recognize a basic fact: the underlying logic of the real estate market has fundamentally shifted. Zhang Xuetao stated at the press conference that the share of second-hand housing transactions rose from 27% in 2020 to 46% in 2025, and in the first eight months of this year, it has already reached 52%. Exceeding the 50% threshold marks the entry of the real estate market into an era dominated by existing housing stock.

The arrival of the stock era means that the old development model—leveraging presales as a fulcrum, high turnover as an engine, and corporate credit as financing backing—has reached its end. Building a new real estate development model requires advancing the project company system and the lead bank system, with risk prevention as the priority and capital circulating within individual projects.

Project Company System: Establishing Independent Project Entities

The project company system sits at the forefront, addressing the fundamental question of "who is the independent entity responsible for the project." Under the traditional presale model, funds for project development and construction were tied to project progress. The new system requires that each project be operated by a dedicated project company, ensuring clear accountability and financial transparency.

Lead Bank System: Risk Management at the Project Level

The lead bank system extends this logic. A single bank or banking syndicate is designated as the lead bank for a project. All funds for development, construction, and sales are deposited with the lead bank, which provides financing services. Both parties engage in a mutual selection process, forming a mechanism of shared benefits and risks.

The key to this mechanism is that it shifts risk management from the overall enterprise group down to individual projects. This requires all parties to implement strict management of project company fund flows, including establishing clear reconciliation mechanisms. Banks, in particular, must audit project company fund movements, especially mismatches in funding gaps, and issue timely warnings to ensure the traceability of capital flows.

Under the new system, whether a project's cash flow is measurable and verifiable becomes the primary criterion for obtaining financing. Correspondingly, the financing model for real estate enterprises is also changing.

Financing Logic Shifts: From "Looking at the Group" to "Looking at the Project"

In the past, the credit foundation of real estate was primarily the development enterprise. Banks looked at corporate size rankings and balance sheets, homebuyers looked at the developer, and local governments looked at the company's land acquisition and development capabilities. The overall logic was based on a "land-centric" mindset.

With the project company system combined with the presale-to-completion sales system, credit assessment in financing will shift from "corporate credit" to "project credit," moving from a focus on "land" to a focus on "housing." Financial institutions will not only consider who the developer is but also examine whether the project's capital can achieve a closed loop, how the construction timeline is controlled, who the customers are, whether the land-turned-housing will be marketable, and whether loans can be repaid.

Homebuyers will no longer rely solely on a developer's past brand reputation to decide whether to purchase. Instead, they will pay more attention to the actual delivery quality of the project, whether the completed homes are "good houses," and the quality of property management.

Narrowing Margin for Error: Enterprises Must Become Multi-Skilled

"Building good houses" concerns incremental supply, while "managing good houses" concerns the existing stock. As the real estate market enters the stock era, the presale-to-completion sales system is an inevitable trend. In the past, problems within a project could sometimes be absorbed through market appreciation, presale proceeds, or later adjustments. Under the presale-to-completion system, a shortfall in any single link—capital, product, engineering, sales, or operations—could jeopardize the entire project.

This requires enterprises to develop comprehensive capabilities across multiple areas, becoming well-rounded "top performers" and fully reshaping the real estate development and operations process.

Enterprises must:

• Prioritize customer relationship management capabilities before land acquisition, expanding the customer base and managing existing customers from the product positioning stage.
• Optimize the supply chain system, reallocating profit margins among general contractors and suppliers.
• Manage the full lifecycle of housing, including construction, maintenance, renovation, and services.

For example, property services must shift from "servicing the property" to "servicing the people," covering diversified needs such as elderly care, childcare, and emergency response. Another example is establishing a housing inspection system and a housing pension mechanism.

Conclusion: A Necessary Transition

Of course, the implementation of these systems will inevitably involve growing pains, but this is a necessary stage in the industry's transformation. The future direction of real estate development has long been clear: to return housing to its essential function of living, protect homebuyers' rights, and steer the industry toward a healthier and more sustainable development track.

(Source: Securities Daily)