Authorities kick off major housing provident fund overhaul
Long-promised reforms to China's housing provident fund (HPF) are finally taking shape.
On June 5, the housing ministry (MOHURD) published a draft revision of the HPF’s governing regulation for public comment – the first major rewrite since 1999.
ICYDK: The HPF is a compulsory employer/employee-funded social insurance program designed to help citizens purchase housing by offering mortgages at below market rates.
The proposed rule changes would:
- Allow HPF savers to tap their accounts to fund home renovations and property management fees
- Open HPF participation to gig workers and the self-employed
- Let the State Council approve additional HPF use cases down the road
The same day, the agency managing HPF accounts for central government employees in Beijing loosened its own withdrawal rules – allowing more frequent withdrawals and enabling HPF-funded housing purchases in other provinces.
None of this comes out of the blue:
- December’s Central Economic Work Conference called for “deepening of HPF reforms” and scores of cities have already relaxed local HPF rules.
Get smart: The change in regulations won’t reverse falling prices or weak confidence, which is why the housing market remains weak.
Get smarter: Still, the overhaul gives households more ways to spend the RMB 10.9 trillion sitting idle in HPF accounts as of end-2024, thereby supporting housing-related spending at virtually zero fiscal cost.