Operational Analysis Report on Shanghai Housing Provident Fund in First-Half of 2013
（First-Half of 2013）
Shanghai Housing Provident Fund maintained good momentum of development amid property market changes and innovation and transformation travail in first-half. Various management issues were conducted and pressed ahead in an orderly manner, with overall balance of liquidity, and steady growth of indexes of main services such as collection, payment, withdrawal and lending.
1. Accomplishments of Various Service Indexes
——Housing Provident Fund Collection: Collection of municipal housing provident fund and additional provident fund during January-June edged up 17.76% year-on-year to 29.918 billion yuan, including 23.102 billion yuan housing provident fund, namely 77% of total collection amount, and 6.816 billion yuan additional provident fund, namely 23% of total collection amount. Cumulative housing provident fund and additional provident fund collection amounted to 384.7 billion yuan as of end-June.
——Housing Provident Fund Payment: The municipal housing provident fund paying units climbed to 0.1492 million as of end-June, showing a year-on-year increase of 0.0221 million units, up 17.39%. Paying employees edged up 0.373 million in size to 5.0288 million, up 8.01% year on year.
——Housing Provident Fund Withdrawal: Withdrawal of housing provident fund totaled 17.938 billion yuan during January-June, up 33.16% year on year, including 14.12 billion yuan withdrawal due to housing consumption (up 38.91% year on year), and 3.818 billion yuan one-off closing-account withdrawal due to causes such as retirement, up 15.49% year on year. Cumulative housing provident fund withdrawal hit 211.9 billion yuan as of end-June, equivalent to 55% of the cumulative collection amount.
——Housing Provident Fund Loans: 33.38 billion yuan worth of housing provident fund home loans were lent out as of end-June, up 115.31% year on year, to 86500 households, up 95.70% year on year, including 1.276 billion yuan worth of home loans to 4543 households for affordable housing purchase during January-June. HPF home loans balance recorded 162.788 billion yuan as of end-June, up 20.738 billion yuan from beginning of the year. Cumulative housing provident fund loans of 334.247 billion yuan were lent out to 1.7618 million households, in support of home purchase of cumulative building area of 160 million square meters.
3.444 billion yuan worth of housing provident fund loans was lent out to support security housing construction during January-June. And cumulative provident fund loans in support of security housing construction amounted to 6.476 billion yuan as of end-June, accounting for 54.05% of the entire housing provident fund loans of the municipality endorsed by the central government to bolster municipal security housing construction as scheduled.
——Risks of Housing Provident Fund Loans: The delinquency rate for housing provident fund home loans recorded 0.163‰ as of end-June.
——Housing Provident Fund Value-Added Proceeds: Housing provident fund service revenues during January-June recorded 3.933 billion yuan, and service expenses amounted to 2.048 billion yuan, with value-added proceeds hit 1.885 billion yuan, up 13.42% year on year.
2. Characteristics of Housing Provident Fund Operation in First-half
1) Paying employees unprecedently exceeded 5 million, with private enterprises continuing to spearhead paying employees’ growth
Shanghai Provident Fund Management Center stepped up efforts to ramp up provident fund system publicity and law enforcement inspection during first-half, which patently boosted paying units’ housing provident fund payment. Paying units that had their accounts newly opened during January-June recorded 20,800, up 33.96% from same period of last year. Paying employees edged up 5 million for the first time and hit a new record high of 5.0288 million. Following are figures showing numbers of paying employees over the past years in this municipality.
The above figures indicated paying units of the municipality climbed year by year from the lowest of 3.1491 million in 2004 to 4.5018 million in 2011, a fifteen-year new high in comparison with the high of 4.4115 million in 1996. Paying employees grew at a faster pace in recent years, an addition of one million within two and a half years during 2011-June 2013, up 8.8% on an average annual basis.
It’s worth mentioning that with paying employees growing at a faster pace, the average span between newly-established units’ industrial or commercial registration and housing provident fund accounts opening was shortened by one to two months. Initial payment rates of housing provident fund after opening of units’ provident fund accounts increased 2 percentage points, reflecting paying units were more aware of and concerned about housing provident fund system.
Further analysis of paying employees growth showed private-sector enterprises’ paying employees continued to spearhead the growth rate. Paying employees of private-sector enterprises hit 1.0223 million as of end-June, up 31% year on year, approximately 23 percentage points higher than the overall paying units’ average growth rate of 8%, thus a major contributor to housing provident fund paying employees’ growth. The constant growth of private-sector enterprises’ paying employees over these years catapulted its coverage rate to 20.3% amongst the entire pool of paying employees, up about 3.5 percentage points from same period of last year.
2) Provident Fund Home Loans Surged amid Property Macro-Regulatory Measures
Transactions at the property market of the municipality rapidly increased in first-half amid the central government’s macro-regulatory measures and monetary easing effort. According to statistics of the housing security authority, transactions of new and existing homes during January-June recorded 5.56 million square meters and 13.71 million square meters respectively, up 56% and 126% respectively year on year. The brisk home transactions triggered a significant increase in provident fund personal home loans. Cumulative provident fund home loans of 33.38 billion yuan were lent out in first-half, up 115.31% year on year. The monthly home loan size in May alone posted 7.239 billion yuan, a record high of monthly loan amount ever since the inception of the provident fund home loans service. Below are figures of provident fund home loans in first-half during 2004-2013.
Further categorized statistics of provident fund home loans in first-half indicated that provident fund home loans issued for purchase of homes in first-half are allocated as follows: in terms of home size, 66% for homes below 90 square meters, 28% for homes between 90-140 square meters and 6% for homes above 140 square meters; in terms of the total home price, 70% for homes below 1.6 million yuan, 13% for homes between 1.6 million yuan and 2 million yuan, 13% for homes between 2 million yuan and 3.3 million yuan, and 4% for homes above 3.3 million yuan. Relevant statistical data showed priority support had been provided by Shanghai Provident Fund for purchase of small-to-mid-sized ordinary-type commercial residences below 90 square meters.
3) Housing Provident Fund Use Became Increasingly Vigorous, Withdrawal Grew at a Faster Pace
HPF withdrawal of this municipality during January-June hit 17.938 billion yuan, a six-year high, up 33.16% year on year, accounting for 59.96% of the collection sum in first-half. Below are figures of percentage rates of withdrawal sums over collection sums during 2008-2013:
Withdrawal increased during January-June due to the following two causes. Firstly, continuing expansion of withdrawal channel made HPF withdrawal more accessible. The municipality had successively promulgated and implemented a slew of policies and measures since 2010, such as HPF withdrawal due to housing rent payment, property service charges payment, repayment of home loans on a monthly basis at non-contracting commercial banks (not yet signed cooperative agreement with SPFMC). This further expanded withdrawal channel to accommodate diversified types of withdrawal and bring paying employees’ initiatives into full play. Statistics showed HPF withdrawal due to housing rent payment in first-half edged up 208.1% year on year. Secondly, upsurge in property transactions boosted growth of withdrawal due to housing consumption. HPF withdrawal due to housing consumption during January-June in this municipality recorded 14.12 billion yuan, up 38.91% year on year, including sum of withdrawal due to repayment of home loans, up 31.5%. In addition, as for those who purchased homes in all cash, the one-off withdrawal due to home purchase increased by 146.2% as of end-June.
4) Shang Jing Yuan Public Rental Housing Leased Successfully as Scheduled, with the Remainder Failing to Meet Large Demand, Waiting List Prepared
Shang Jing Yuan, the first pilot public rental housing invested by Shanghai Provident Fund, was leased successfully in first half of this year. The public rental housing had been welcomed by an increasing number of HPF paying employees owing to its good quality and service and its rent at a level below the market price ever since its public debut at the beginning of 2012. A cumulative total number of 2164 HPF paying employee households compliant with the public rental housing application requirements had gone through the formalities to sign the lease agreement as of end-June, accounting for 98.4% of the eligible applicants. Amongst them, 1673 households had moved in, resulting in an occupancy rate of 76%. The remainder of the public rental housing had failed to meet the excessive demand so that some applicants had to be put on a waiting list for them to wait for approval.
3. Recent Major Issues in Focus
1) Provident Fund Law Enforcement Inspection Became Regular Routine Work
The municipal provident fund law enforcement inspection entered its sampling inspection stage in third quarter in the wake of paying units’ self-checking and self-correction in second quarter. In previous self-checking and self-correction stage, the vast majority of paying units proceeded to self-checking and proactively made corrective actions as necessary pursuant to Notice on Launching of Law Enforcement inspection of Status of Housing Provident Fund Payment in the Municipality, the state council’s Regulations on Management of Housing Provident Fund and Provisions of Shanghai Municipality on Administration of Housing Provident Fund. Nevertheless, a minority of paying units failed to take timely remedial actions against violations after self-checking. SPFMC shall team up with the municipal trade union to jointly conduct sampling inspection on these failing units, supervise them in making corrections of the nonconformities as noted in course of the inspection, and even go a step further to document handling process of those problematic cases wherever necessary. Housing provident fund law enforcement of the municipality is to evolve to the stage of regular routine work in the wake of the inspection campaign.
2) Continue Implementation of Real Estate Regulatory Policies in a Move to Prop up Self-Occupying Improvement-Oriented Housing Consumption
SPFMC shall continue implementation of real estate macro-regulatory policies of the state and the municipality in a move to carry out differentiated lending policies, with a keen focus on changes of the municipality’s real estate market, providing provident fund loans to eligible home purchasers of joint ownership security housing and self-occupying improvement-oriented housing, bringing HPF withdrawal access to eligible employees for rent payment of low-income households’ rental housing and public rental housing, and to eligible needy employees’ households for property service charges payment.
3) Jing Hua Fang Public Rental Housing Ready for Lease to HPF Paying Employees
Jing Hua Fang Public Rental Housing at Jing Cheng of Shanghai, invested by Shanghai Housing Provident Fund, is to be completed, poised to be launched appropriately for lease to eligible HPF paying employees’ households in second half of this year after four months’ construction of interior decoration. Jing Hua Fang, located at Zhu Mei Road, Minhang District, comprises 1680 sets of diversified apartments, including 432 sets of 52-square meter one-room apartments, covering 25.7%, 1144 sets of 74-square meter two-room apartments, covering 68.1%, 104 sets of 90-square meter three-room apartments, covering 6.2%. The project features streamlined interior decoration and arrangement based on management and operation of Shang Jing Yuan Public Rental Housing, and introduction of major home electric appliances market renting mechanism in a bid to further control the cost for rent reduction to meet requirements of low- and medium-income paying employees’ households.
Shanghai Provident Fund Management Center
July 2013
