Operational Analysis Report on Shanghai Housing Provident Fund in Q1 of 2013
(Q1 of 2013)
Shanghai housing provident fund maintained normal operation in the first quarter, with steady growth in collection and withdrawals. Homebuyer loans edged up rapidly due to residential property market fluctuation. Various management issues were conducted and pressed ahead in an orderly manner.
1. Accomplishments in Various Services Indexes
——Housing provident fund collection: Housing provident fund and additional provident fund collected in 1st quarter amounted to 14.798 billion yuan, up 16.37% year on year, including 11.431 billion yuan housing provident fund, 77% of the collection amount, and 3.367 billion yuan additional provident fund, 23% of the collection amount. The cumulative collection of housing provident fund and additional provident fund was 369.6 billion yuan as of end of March.
——Housing provident fund payment: As of end of 1st quarter£¬the number of housing provident fund paying units of the municipality increased by 18300 to 140500 units, up 14.98% year on year, and the number of paying employees hit 4.893 million, up 7.15% by 326300 employees year on year.
——Housing provident fund withdrawal: Housing provident fund withdrawal in 1st quarter totaled 6.696 billion yuan, up 24.18% year on year, including 4.749 billion yuan withdrawal due to housing consumption, up 32.99% year on year, and 1.947 billion yuan withdrawal due to causes such as retirement, up 6.86% year on year. The cumulative withdrawal as of end of March was 200.7 billion yuan, accounting for 54% of the cumulative collection amount.
——Housing provident fund loans: Housing provident fund home loans lent out in 1st quarter was 14.668 billion yuan, up 144.10% year on year, for a total of 37900 households, up 112.44% year on year, including loans worth 0.671 billion yuan issued to 2298 affordable housing homebuyers in 1st quarter. Housing provident fund home loans balance as of end of March was 151.863 billion yuan, indicating an increase of 9.813 billion yuan from beginning of the year. The cumulative housing provident fund home loans issued was 315.5 billion yuan, shoring up 1.7133 million home purchasers’ building area of 0.156 billion square meters.
Housing provident fund loans issued in support of security housing construction projects in 1st quarter hit 1.834 billion yuan, and as of end of March, the cumulative security housing supported loans issued was 4.866 billion yuan, equivalent to 41% of the scheduled municipal security housing oriented provident fund loans endorsed by the central government.
——Housing provident fund loans risks: As of end of 1st quarter, delinquency rate for housing provident fund home loans amount was 0.097‰.
——Housing provident fund value-added proceeds: Housing provident fund services revenues of 1st quarter recorded 1.79 billion yuan, services expenses 1.03 billion yuan, and thus value-added proceeds 0.76 billion yuan, up 53.23% year on year.
2. Characteristics of Housing Provident Fund Operation in 1st Quarter
(1) Housing provident fund home loans lent out in Q1 surged to a record high on account of significant growth of housing transactions.
Home loans demand increased significantly in 1st quarter due to housing transactions’ gaining steam since second half of last year and abrupt upsurge of housing transactions prompted by the debut of the “five property tightening regulatory measures by the central government” in early march. According to statistical data from the housing security and property management authority, housing transactions in the municipality in 1st quarter escalated enormously year on year, and transactions of second-hand homes obviously outnumbered transactions of newly-built commercial housing, with both transactions setting new highs in March. Housing provident fund home loans issued in 1st quarter revealed a momentum of rapid growth accordingly. Housing provident fund home loans issued during January-March period recorded 5.534 billion yuan, 3.939 billion yuan and 5.195 billion yuan respectively. The cumulative loans lent out in 1st quarter was 14.668 billion yuan, setting a new high comparing with the same period of previous years.
Home loans structure indicated that provident fund loans issued in 1st quarter showcased the following characteristics: First, support for home buyers of joint-ownership security housing (affordable housing) was boosted, with 0.671 billion yuan provident fund loans issued to affordable housing purchasers in 1st quarter, average loan size per household equivalent to 292,000 yuan, up 16% from 252,000 yuan of 2012. Second, employees’ second improvement-oriented homes sligthly increased to 11% from 8% of last year. Third, second-hand homes increased. Housing provident fund loans for second-hand homes handled during 1st quarter accounted for 73%, up 9 percentage points from 2012. Such structural changes reflected the status quo of citizens’ eagerness for home purchase in an effort to avoid personal income tax in 1st quarter.
(2) Accelerated growth of withdrawals due to housing consumption as a result of the policies for various withdrawals taking effect.
Various new withdrawal policies was implemented in 2012, such as withdrawal due to rent payment, property services charges and expanded applicable scope of borrowers’ loans repayment. These policies began to take effect in 1st quarter. Housing provident fund withdrawals due to housing consumption increased by 32.99% from same period of last year, up 21 percentage points year on year, one of the fastest growths in recent few years.
According to statistical analysis, withdrawals due to rent payment, purchase of commercial housing and loans repayment by means of housing provident fund indicated fastest growth, 556.7%, 135.8% and 22.2% respectively, accounting for 95.4% of the total housing consumption withdrawals and 71% of the total withdrawals, up from 66% of same period of last year. Policies for more convenient housing provident fund withdrawals satisfied paying employees’ demand for housing consumption such as home purchase, loans repayment and housing renting.
(3) Sustained yet Slower Increase of Paying Employees
The number of municipal housing provident fund paying employees by end of 1st quarter hit 4.893 million, up 7.15% by 326,300 year on year. More and more liable units had been making housing provident fund payment for employees, which prompted fast growth of paying employees since the housing provident fund system coverage expansion campaign was launched in 2010.
The number of paying employees with newly-opened provident fund accounts increased by 99,000 in 1st quarter in the municipality, down 25.3% year on year, due to factors such as job placements of the labor market. Meanwhile, account-closing withdrawals due to retirements and labor relationship transfer of nonlocal employees (with domicile registration in other provinces) increased to 56,000 persons, up 14.2% year on year, among the highs in recent years. The decrease of paying employees with newly-opened accounts and the increase of account-closing employees led to slower growth of paying employees.
Further analysis of paying employees structure indicated: (1) Coverage of enterprise paying employees continued to escalate , whereas coverage of paying employees in state organs and public institutions continued to slide. As of end of March, enterprise paying employees covered 84.1% of the entire paying employees, up 1 percentage point year on year, and paying employees in state organs and public institutions covered 13.6%, down 1 percentage point year on year. (2) Growth rate of private-sector enterprises was the highest, equivalent to 25%, followed by 6% and 4% respectively for foreign-funded enterprises and collective enterprises. The rapid growth of paying employees in private-sector enterprises led to 3 percentage points increase at 18.9% year on year in terms of its coverage among the entire paying employees. The fast increase of paying employees in private-sector enterprises became the new limelight of housing provident fund coverage expansion in recent years.
3. Major Issues in Focus
(1) Strictly implement differentiated provident fund loans policies and ensure support for joint-ownership security housing, self-residing and improvement-oriented housing purchasers’ loans demand.
Shanghai Provident Fund Management Center shall resume strict execution of differentiated provident fund loaning policies and conduct close reviews of applicants’ qualifications for provident fund home loans for assured compliance with property regulatory policies of the municipality, in accordance with macro regulatory measures of the municipality and the central government and Instructions of the Municipality on Implementing Announcement of the State Council’s General Office on Carrying on Property Market Tightening Measures (HFBF [2013]No.20). The Center shall also make arrangement for adequate fund to meet the demand of the home purchase applicants, self-residing and improvement-oriented housing buyers in the municipality, for provident fund loans.
(2) Launch enforcement inspection of housing provident fund payment to give legal teeth to safeguarding paying employees’ legitimate rights and interests.
The Center shall seek coalition with the municipal trade union to ratchet up joint effort to launch municipality wide enforcement inspection of housing provident fund payment in 2nd quarter in a bid to further strengthen housing provident fund payment management and safeguard paying employees’ legitimate rights and interests. The enforcement inspections shall resort to a combination of units’ self-checking and self-corrections and sampling enforcement inspections, with a focus on payment status of all units, especially those units that failed to apply for housing provident fund payment registration or failed to help open housing provident fund accounts for all employees and make normal payment. Any nonconforming cases arising during inspections shall be resolved pursuant to relevant regulations.
(3) Press ahead decoration project of the Jing Hua Fang public rental housing to ready for lease
Shanghai Provident Fund Management Center invested housing provident fund’s value-added proceeds in acquiring Jing Hua Fang, the second public rental housing project, located on Lao Hu Min Road at the juncture of Minhang District and Xuhui District, with a building area of 116,700 square meters (1680 sets of apartments). The interior decoration of Jing Hua Fang public rental housing was initiated in 1st quarter and is scheduled for completion in July. The Center is currently pressing ahead to draw up the lease plan and determine the operating unit of the public rental housing ready to unveil in second half of this year for lease to households of qualified provident fund paying employees.
Shanghai Provident Fund Management Center
April, 2013
