Operational Analysis Report on Shanghai Housing Provident Fund (1st Quarter of 2014)
Orderly stable operation of this Municipality’s housing provident fund was maintained in the first quarter with sustained growth of collection and withdrawal. Home loans declined in scale due to subdued housing transactions. Fund operation remained safe ascribed to good control of risks.
1. Accomplishments of Various Services Indexes
HPF Collection: Collection of housing provident fund and additional provident fund in 1st quarter totaled 17.121 billion yuan in this Municipality, up 15.70% year on year , including 13.373 billion yuan of housing provident fund collection, accounting for 78% of the total collection, and 3.748 billion yuan of additional provident fund collection, accounting for 22% of the total collection. As of end of March, the cumulative collection of housing provident fund and additional provident fund amounted to 436 billion yuan.
HPF Payment: As of end of 1st quarter, the Municipality’s housing provident fund paying units recorded 168,400, up 19.86%, namely, an increase of 27,900 from same period of last year. Paying employees totaled 5.4825 million, up 12.05%, namely, an increase of 589,500 from same period of last year.
As of end of 1st quarter, the Municipality’s housing provident fund payment totaled 460 billion yuan, and payment balance recorded 219.5 billion yuan.
HPF Withdrawal: 1st quarter’s housing provident fund withdrawal totaled 8.862 billion yuan, up 32.35% year on year, including 6.384 billion yuan of withdrawal due to housing consumption, up 34.43% year on year, and 2.478 billion yuan of account closure withdrawal due to causes such as retirement, up 27.26% year on year. As of end of March, the cumulative withdrawal of housing provident fund totaled 240.5 billion yuan, accounting for 55% of the cumulative collection.
HPF Loans: The first quarter’s housing provident fund home loans issued recorded 12.448 billion yuan, down 15.14% year on year, supporting a total of 32,500 households, down 14.44% year on year. Of the first quarter’s loans, 748 million yuan of loans were issued to 2493 joint-ownership security housing purchasing households. As of end of March, the balance of housing provident fund home loans registered 186.535 billion yuan, up 7.704 billion yuan from beginning of this year, with a cumulative 374.8 billion yuan of housing provident fund home loans issued to a total of 1.8665 million households in support of a total building area of 168 million square meters.
The first quarter’s security housing projects oriented housing provident fund loans recorded 204 million yuan. As of end of March, the cumulative security housing projects oriented loans recorded 8.164 billion yuan., the cumulative collection of loan principals 945 million yuan and balance of projects oriented loans 7.219 billion yuan.
Risks of HPF loans: As of end of 1st quarter, delinquency rate for housing provident fund home loans amount was 0.19‰
HPF value-added proceeds: Revenues for housing provident fund services in 1st quarter totaled 2.225 billion yuan, and expenditure on services totaled 1.214 billion yuan. Value-added proceeds realized were 1.011 billion yuan, up 33.03% year on year.
2. Characteristics of Housing Provident Fund Operation in the First Quarter
(1) HPF home loans slid, with structure of home loans adjusted.
In 1st quarter, this Municipality’s housing transaction volume indicated a dramatic month-on-month and year-on-year decline, edging down for four consecutive months since November of last year, ascribed to causes such as macro-regulatory policies, Spring Festival holidays and cancellation of commercial banks’first suite preferential interest rates on home loans. Consequently, housing provident fund home loans edged down for three consecutive quarters from its high level in 3rd quarter of last year at 15.362 billion yuan, followed by 12.714 billion yuan for 4th quarter of last year and 12.448 billion yuan for 1st quarter of this year.
Structure of home loans indicated the following characteristics of 1st quarter’s provident fund home loans: 1) The percentage of the pure provident fund loans processed edged up versus that of the combined loans, from 2013’s 44% and 56% to the first quarter’s 49% and 51%, respectively, indicating a five percentage points increase in the proportion of pure provident fund loans, in contrast to the subdued proportion of combined loans reflecting the tightening of commercial banks on home loans since beginning of this year. 2) The proportion of the loans for new homes escalated month by month in comparison with the proportion of the loans for existing homes, namely, 36% for January, 41% for February and 47% for March, showing an average of 41%, up 5 percentage points from 2013. At the same time, proportion of home loans for housing inventories extended a downward slide. 3) Loan amount per household declined for the first time since 2010, down 0.8% for first suite and 1.2% for improvement-oriented second suite. In the first quarter, aside from factors such as joint-ownership security housing, families with home loans below 0.4 million yuan account for 71%, up 1 percentage point from 2013, indicating this Municipality’s provident fund home loans had been mainly supporting consumption of low- and medium- level ordinary housing.
Following is a diagram illustrating provident fund home loans handled vs. issued on a quarterly basis over the past four quarters:
(2) New paying employees indicated fast growth in tandem with synchronous expansion of account-blocked and payment-suspended employees
The municipality’s new paying employees of the first quarter hit a new high year on year since 2010 at 202,500, comprising 145,600 employees with newly-opened accounts, covering 72%, 56,900 reactivated account-blocked and payment-suspended employees, covering 28%. The first quarter’s new paying employees surged by 47.70% year on year, up 27 percentage points from the average growth rate for new paying employees in same periods of last 5 years. Among the employees with newly-opened accounts, private enterprises covered the highest percentage rate at 44.41%, followed by 19.83% for foreign-funded enterprises. Likewise, both foreign-funded and private businesses recorded the highest growth rates at 68.77% and 52.70% respectively in regard of the employees with newly-opened accounts.
Aside from fast growth in terms of new paying employees, existing paying employees recorded a drastic reduction due to various causes, by 63.30% year on year, namely, 195,800, in the first quarter. In view of the fast growth partly offset by the reduction, the net increase of paying employees in 1st quarter recorded 6,700, hitting the lowest level over recent years.
Following is an illustration of data about new paying, account-closed, account-blocked, payment-suspended and net additional employees in 1st quarters of 2010 through 2014:
Existing paying employees’reduction was directly caused by account blocking and payment suspending. The first quarter’s account blocking and payment suspending recorded 130,800 employees, up 103.11% year on year. Account blocking was attributed to employment relationship termination, covering 99%. Payment suspending was mainly attributed to the employee accounts put on hold pending transfer, closure or payment, accounting for 41%, 25.46% and 33.54% respectively.
In regard of types of the units of those account-blocked and payment-suspended employees, analysis showed the majority fell into the categories of private enterprises, collective enterprises and the like, and foreign-funded enterprises, accounting for 40%, 23% and 21% respectively. A small minority belonged to state-owned enterprises, organs, institutions and associations.
Following is a diagram showing the structure of types of units of those account-blocked and payment-suspended employees in 1st quarter.
The above structure indicated greater employee mobility across private enterprises, collective enterprises and the like, foreign-funded enterprises at the current job market.
(3)Sound operation of provident fund invested public rental housing revealed steady return on investment
Operation of Municipal Provident Fund Center funded public rental housing was running smoothly in the first quarter. Shang Jing Yuan’s occupancy rate had steadily increased since its debut at beginning of 2012, hitting 99% by end of 1st quarter. The rent collection percentage rate upped continually. The cumulative rent earnings as of end of 1st quarter recorded 91.4246 million yuan, with a rent collection rate of 98%. Collection of rent in 1st quarter totaled 17.6447 million yuan. Rent earnings had evolved to be a source of steady cash flow, which indicated reasonable rent pricing of public rental housing had achieved fairly high social recognition.
Shang Jing Yuan has now entered normalization stage of its lease in the wake of successfully receiving the first batch of tenants upon fulfillment of centralized rental housing supply to and agreement signing with eligible applicants pursuant to regulations of relevant authorities of the Municipality since its official launch in December 2013. As of end of 1st quarter, households having signed the lease contract totaled 755, covering 44.94% of the approved households.
3. Key Issues to Focus on Recently
(1) Conduct enforcement inspection of housing provident fund payment in this Municipality in a bid to ramp up expansion of housing provident fund system coverage
Starting from 2nd quarter, Municipal Provident Fund Center, Municipal Provident Fund Management Committee and Municipal Trade Union shall jointly conduct municipalitywide enforcement inspection of housing provident fund payment, with units’self inspection and correction scheduled as of April through July, sampling enforcement inspection scheduled as of August through October, for all units in this Municipality. The inspection shall closely focus on those noncompliant units failing to fulfill housing provident fund payment registration procedures or open housing provident fund personal accounts for their staffs. Penalties shall be imposed as appropriate upon nonconformities identified during inspection in accordance with relevant regulations.
(2) Keep on strictly carrying out differentiated provident fund credit policies and streamline withdrawal policies
Differentiated provident fund credit policies shall be strictly carried out in 2nd quarter, with a focus on bolstering self-occupying and improvement oriented home loans, particularly loans demands of joint-ownership security housing, in an effort to retain continuity and stability of policies for provident fund home loans.
Meanwhile, steps shall be taken to better facilitate services to employees and gradually relax policies on, broaden scope of, and raise limit for provident fund withdrawal due to payment for housing rent and property services charges, as per requirements for improvement of housing provident fund withdrawal and use as illuminated in resolutions of the Third Plenary Session of the Eighteenth Committee of the CPC, in an aim to further engage provident fund in its positive role in housing consumption promotion.
(3) Push on with online payment base adjustment activities in a bid to improve working efficiency.
July 1 is a provident fund fiscal year’s initial date for vesting payment base adjustment. As yet, growth of online payment base adjustment has outpaced that of traditional payment base adjustment in various services outlets ascribed to development of online provident fund services. Fiscal year 2014’s payment base adjustment shall be conducted through online venues in a move to improve working efficiency. Regarding relevant housing provident fund payment base adjustment documents, data, requirements for handling of services and operational procedures for online adjustment, all units shall be made accessible to the special column of payment base adjustment for queries and download to directly handle payment base adjustment procedures.
(4) Make full use of informatization for services standards upgrade
In the informatization-focused year 2014, Municipal Provident Fund Center shall resort to informatization measures to further upgrade management and service standards as scheduled. In 2nd quarter, HPF ATM (Automated Teller Machine) query services shall be poised to provide information about personal provident fund accounts. Any HPF paying employee holding a CCB bank card (either a credit card or a savings card) shall be made accessible to any of the 3000+ ATMs located in this Municipality for personal HPF account related information. In 2nd quarter, Municipal Provident Fund Center shall be prepared for construction of the 12329 SMS Service Platform readying for launch at an appropriate time to further promote timely, convenient and individualized services to paying employees.
Shanghai Provident Fund Management Center
April 2014
