Economic Watch: Will the house price go up if the "common pool area" is cancelled?

　　China News Agency, Beijing, September 6th: Will the house price increase if the "common pool area" is cancelled?

　　China News Agency reporter Pang Wuji

　　Recently, the discussion on the housing pool area has continued to heat up.

The Housing and Urban-Rural Development Department of the Inner Mongolia Autonomous Region recently stated in response to the proposal of the CPPCC members that the proposal to cancel the "common pool area" is listed as a legislative project that needs to be revised urgently in the near future. The proposal should be submitted to the Ministry of Housing and Urban-Rural Development.

　　Previously, a house buyer in Qingdao, Shandong revealed that he purchased a house of 110 square meters, but found that the area of ​​the apartment was only 61 square meters, and the public pool area was as high as 46%, which caused heated discussions among netizens.

Can the pool area be cancelled?

Will the house price increase after the cancellation of the "communal area"?

How much is the common pool area?

　　Hu Jinghui, chief economist of Jinghui Think Tank, told a reporter from China News Agency that public pools mainly refer to the shared public building area, including elevator shafts, pipeline wells, stairwells, and public halls of buildings.

The shared area plus the building area of ​​the suite is equal to the building area of ​​the house.

Except for single-family villas, most other types of houses have a certain shared area.

　　Most urban housing in China is priced based on the floor area of ​​the house including the public share, which means that buyers need to pay for the share of the public share that they do not live in.

　　Hu Jinghui believes that a reasonable public pool area is around 15%.

Of course, the specific settings are also different depending on the house type, building type, and housing project.

In general, the high-rise elevator apartment has a larger share, while the villa share is smaller.

Should the pool area be abolished?

　　Hu Jinghui believes that the public pool area is clearly stipulated in the "Administrative Measures for the Sales of Commercial Houses" implemented in 2001.

The practice of public pooling was learned from Hong Kong, but in 2013, Hong Kong has abolished the pooling of pools, and the price is calculated using the area inside the suite.

At present, the vast majority of countries and regions use the area of ​​the suite to trade houses.

The Chinese city of Chongqing also abolished public stalls in 2002 as a pilot.

Therefore, it is not impossible to cancel the public pool.

　　He believes that there will be some management problems in the cancellation of public pools, such as: how to deal with the existing housing, how to connect the new and old methods, etc.

But after the cancellation, the public can buy a house clearly, which will also help boost market confidence.

　　Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, believes that the model of including the public share in the purchase area has existed for many years and cannot be cancelled overnight.

At present, the dissatisfaction of home buyers is mainly concentrated on the opacity of the common pool area: is the common pool really needed so much, and is the common pool area of ​​a house really as large as the developers claim?

If the real public share is reasonable and can be clearly shown to the buyers, and there is no such thing as inflating the public share area to increase the developer's profits, then there is no problem in retaining the public share.

　　Li Yujia believes that the management of public stalls needs to be more refined.

One approach is to calculate whether there is a difference between the cost of sharing and the cost of building a house.

If so, can it be priced separately?

Another example: introducing an independent third party to measure the public pool area, so that all public pool information is clear and transparent during the pre-sale stage.

Will the cancellation of public housing prices increase?

　　Hu Jinghui believes that the cancellation of the public pool will not lead to an increase in the total housing price, because the addition or cancellation of the public pool area is only a change in the pricing method.

For many home buyers, what they care about is the actual home price (total price).

If the pricing method and area are changed only because of the cancellation of public sharing, which brings about fluctuations in the unit price of houses, there may be some impact in the short term, but there is almost no impact on medium and long-term housing prices.

　　Li Yujia holds a different view.

He believes that after the abolition of public housing, the unit price of houses will definitely rise.

If you suddenly transition to calculating house prices based on the area of ​​​​the suite, it will push up the market price, which is unlikely to be done in practice.

Therefore, two pricing methods may be given in the follow-up: one is the pricing method that includes public sharing, and the other is the pricing method that does not include public sharing. Both methods are listed, which will affect the market and home buying sentiment. will be much smaller.

Is now a good time to abolish public stalls?

　　Hu Jinghui said that major reforms are often more likely to occur during the downturn of the industry.

Since the third and fourth quarters of last year, China's real estate industry has entered a low ebb.

There is a lot of discussion about abolishing the public pool now. If you follow the trend, it may be easier to push for reforms than when the industry is "singing forward".

　　Li Yujia believes that the current call for the cancellation of public stalls is very high, which reflects the demands of the people. If this can be used to further regulate and rectify market chaos, combined with other recent government work, it will have the effect of boosting confidence in the property market.

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