operational analysis report on shanghai housing provident fund
(third quarter of 2014)
the operation of the municipality’s housing provident fund was prudently managed in the third quarter of 2014, with sustained growth of housing provident fund paying units, paying employees and collection, in contrast with the slightly declining home loans in terms of the issuing scale. the main services indexes have been accomplished as expected.
1. accomplishments of various services indexes
——hpf collection: housing provident fund and additional provident fund collected during january-september period totaled 53.657 billion yuan, up 14.46% year on year, comprising a housing provident fund collection amount of 42.002 billion yuan, equivalent to 78% of the total collection amount, and an additional provident fund collection amount of 11.655 billion yuan, 22% of the total collection amount. as of end of september, the cumulative collection amount of housing provident fund and additional provident fund totaled 472.6 billion yuan.
——hpf payment: as of end of september, housing provident fund paying units of the municipality recorded 194,800, an increase of 37,500, up 23.84% from same period of last year. the paying employees recorded 5.8428 million, an increase of 538,100, up 10.14%.
——hpf withdrawal: housing provident fund withdrawal during january-september period totaled 34.556 billion yuan, up 18.66% year on year, comprising 27.203 billion yuan withdrawn for housing consumption, up 17.09% year on year, 7.353 billion yuan for account closure withdrawal due to causes such as retirement, up 24.85% year on year. as of end of september, the cumulative housing provident fund withdrawal amount totaled 266.2 billion yuan, accounting for 56% of the cumulative collection amount.
——hpf home loans: housing provident fund home loans released during january-september period totaled 37.151 billion yuan, down 23.78% year on year, benefiting 97,200 households, down 23.04% year on year, including 3.747 billion yuan for affordable housing oriented home purchase loans to 13,100 households. the balance of hpf home loans as of end of september totaled 196.775 billion yuan.
——hpf home loans risks: hpf home loans delinquency rate recorded 0.20‰ as of end of september.
——hpf value-added proceeds: the january-september hpf services revenues and expenses recorded 7.159 billion yuan and 3.928 billion yuan respectively, and value-added proceeds hit 3.231 billion yuan, up 13.53% year on year.
2. operational characteristics of hpf in third quarter
(1) sustained growth of collection, but at a slackening pace
the municipality’s hpf collection in third quarter hit 19.411 billion yuan, up 14.44% year on year, covering 36.2% of the january-september municipal hpf collection at 53.657 billion yuan, upped 4.3 percentage points from the previous two quarters’ average coverage rate of 31.9%. the rapid increase in third quarter’s collection is attributed to the annual payment base adjustment, catapulting the monthly payment cap of the new fiscal year starting july 1 to a 7.4% rise from 2013 in sync with paying units’ more prompt hpf monthly payment due to their adoption of the promoted online basis adjustment approach, and the growth of paying employees in third quarter, namely, an increase of 538,100 from same period of last year, ascribed to reactivation of about 80,000 blocked or suspended accounts as a result of the more standardized account blocking procedures following implementation of measures on spf account blocking management as of july 1, as well as enhanced payment coverage expansion.
further analysis of the collection indicates sustained growth of the municipality’s housing provident fund payment in recent years, yet at a slackening pace. housing provident fund collection during january-september period of 2014 upped 14.46% year on year, with a growth rate about 2 percentage points lower than same period of 2013, or about 5 percentage points lower than same period of 2012.
below is a chart indicating the growth rates for collection during january-september period from 2010 to 2014.
the slackening growth of the collection is mainly attributed to: 1) the decrease in growth rate of the monthly payment amount per capita, the monthly payment amount per capita in third quarter of 2014 succeeding the annual basis adjustment is 877 yuan, up just 5.4% from same period of last year, yet nearly 2 percentage points lower than growth rate of the average monthly salary of the municipality’s employees; 2) the average monthly payment amount of the additional paying employees being relatively low despite the growth of paying employees. the additional paying employees during january-september of 2014 totaled 720,000, with a monthly payment amount per capita being just 445 yuan, equivalent to 51% of the monthly payment amount per capita of the municipality.
(2) percentage of paying units in rural areas increases each year, newly registered paying units featuring a growing trend towards smaller startups.
as of end of third quarter, the municipality’s housing provident fund paying units recorded 194,800, up 23.84% year on year, with suburban paying units accounting for 54%, up about 3 percentage points from same period of 2013 and 6 percentage points from same period of 2012. the increasing percentage of suburban paying units results from throngs of manufacturing enterprises’ relocation in the suburbs, and numerous startups’ settling in new suburban industrial parks due to preferential policies.
newly registered paying units also feature a growing trend toward smaller startups. the newly registered paying units during january-september period of 2014 recorded 35,400, with an average number of paying employees per unit standing at 9. further analysis showed that the average numbers of paying employees for each newly registered paying unit during same period from 2010 to 2013 stood at 23, 19, 14 and 11 respectively. the average numbers of newly registered paying units’ paying employees skidded year by year over the recent five years.
below is a chart showing the numbers of newly registered paying units and the average numbers of paying employees during january-september period from 2010 to 2014:
the escalating newly registered paying units and the tapering paying employees over the recent five years indicates the brisk growth of the new economic entities, typically the private economy, of the municipality, heralding the long-term growth trend of newly registered paying units and employees.
(3) housing provident fund home loans extended a gentle downward slide in terms of scale, with average volume of loan per household climbing year by year.
housing provident fund home loans issued in third quarter recorded 11.175 billion yuan (3.897 billion yuan, 3.587 billion yuan and 3.691 billion yuan for july, august and september respectively), down 10.23% and 17.39% from first quarter and second quarter respectively, namely, the lowest among the previous three quarters of this year. the amount of housing provident fund home loans released during the past three quarters of this year, in comparison with same periods of the last five years, only lags behind 2013’s 48.742 billion yuan, and dwafted 2012’s 29.071 billion yuan, 2011’s 20.771 billion yuan and 2010’s 22.946 billion yuan by 1.3 folds, 1.8 folds and 1.6 folds respectively. relevant analysis shows the citizens have been in a rational housing consumption mindset in the first three quarters of this year against the backdrop of relatively steady domestic real estate policies. housing provident fund home loans dipped a little lower than last year in terms of scale, but still retained its high level position in comparison with the historic average. further analysis indicated that the average volume of loan per household for commercial residences of the municipality (joint-ownership housing not included) in the previous three quarters of 2014 stood at 400,000 yuan, up 2.5 percentage points from last year, marking the highest level in the recent five years while maintaining a growing momentum. below is a chart for loans issued during the first three quarters of the recent five years versus the average loan volume per household:
the average volume of commercial residence purchase loan per household picked up, indicating provident fund’s stepping up support to commercial residence purchasers.
3. recent major issues in focus
(1) the notices on developing provident fund home loans issued by authorities such as ministry of housing and construction shall exert positive influence on the provident fund policies of this municipality.
notice of pbc and cbrc on further improving financial services for real estate sector issued on september 30 and notice on developing housing provident fund home loans released by ministry of housing & construction, ministry of finance and people’s bank of china on october 10 require those cities with a home loans percentage below 85% to step up efforts to develop housing provident fund home loans, increase the home loans percentage and bolster payinig employees’ purchase of first homes and improvement-oriented homes. shanghai has been a city with rapid development in provident fund home loans, and has sustained a high level of home loans percentage, with an average of 85% attained for first half of 2014. the notices released by ministry of housing & construction and people’s bank of china shall have a new impact on the provident fund home loans policies of this municipality. spf center has been actively developing relevant policies as per the requirements of relevant state authorities, readying for launch at the right time after approval by municipal provident fund management committee.
(2) ramp up housing provident fund payment law enforcement in an aim to expand housing provident fund payment coverage.
provident fund payment law enforcement inspection shall be targeted as one of the key tasks for provident fund management of this municipality in 2014. provident fund paying units conducted self checking and self corrections in the third quarter in accordance with announcement on municipalitywide housing provident fund payment law enforcement inspection in 2014 jointly issued by municipal provident fund management committee, municipal trade union and municipal provident fund center, and has so far made good progress. however, a minority of paying units haven’t completed self checking and corrections as yet accordingly. spf center shall conduct law enforcement inspection over a portion of those paying units failing to take self checking and corrective measures as required, supervise them in making corrections, and impose administrative penalities as necessary or appy to the court for mandatory enforcement measures over the units failing to take remedial corrections in wake of inspection and supervision. spf center shall also publicize these nonconforming paying units on shanghai provident fund website accordingly, provide relevant violation information to shanghai public credit information service platform, and apply to the people’s court for putting them under bad-credit name list pending administrative enforcement.
(3) take the opportunity of ministry of housing & construction’s ad hoc supervisory inspection of services to push ahead with housing provident fund services.
in the fourth quarter, spf center shall take the opportunity of the ad hoc supervisory inspection of services to meticulously conduct self checking of various tasks such as execution of instructions on services and service commitments, service outlets related environmental regulation and service disciplines exercising as per requirements of ministry of housing & construction’s notice on launch of ad hoc supervisory inspection to enhance and improve housing provident fund services. interbank monthly hpf payment shall be developed as a new service measure and made accessible to facilitate paying units’ operation and further improve the standards of provident fund services, in tandem with the official launch of sms 12329 service platform and ccb’s atm self-service query terminals.
shanghai provident fund management center
october 2014
