Guangxi's First Deal! Zeshi Helps Pinggui District of Hezhou City Accelerate the Pace of Reducing Inventory of Existing Commercial Housing.

Since 2020, China’s real estate inventory has been steadily increasing. According to the latest data from the National Bureau of Statistics, as of the end of February 2024, the total inventory of commercial residential properties nationwide reached 759.69 million square meters, up 15.9% year-on-year. Although the inventory slightly declined in March to 748.33 million square meters, residential inventory still rose by 23.9% year-on-year, reaching 394.58 million square meters. This indicates that the current real estate market is facing unprecedented challenges and urgently requires effective measures to accelerate inventory destocking.

Year-on-year comparison of national inventory of commercial housing

Data source: National Bureau of Statistics
Currently, the nationwide real estate market is characterized by high inventory levels, particularly with residential housing inventories reaching historic highs. On April 30, 2024, the Political Bureau of the CPC Central Committee issued guidelines calling for “comprehensive planning and effective digestion of existing housing stock,” with the aim of promoting the healthy and stable development of the real estate market. Subsequently, the Ministry of Natural Resources released the “Notice on Doing a Good Job in the Supply of Residential Land in 2024,” clearly stating that for cities where the sales absorption period for commercial residential properties exceeds 36 months, the granting of new commercial residential land should be temporarily suspended. For cities with an absorption period between 18 and 36 months, the supply of residential land should be flexibly adjusted based on actual sales performance.

Against this backdrop, on May 17, 2024, regulatory authorities further introduced a series of control measures, including lowering the down payment ratios for first- and second-home purchases to 15% and 25%, respectively; abolishing the lower limit on commercial mortgage interest rates; and reducing the interest rates on housing provident fund loans. Meanwhile, the People's Bank of China plans to establish a re-lending program for affordable housing with a total amount of up to 300 billion RMB, aimed at supporting local governments or state-owned enterprises in acquiring completed but unsold residential properties and converting them into affordable housing units available for sale or rent. Affordable housing is an important component of China’s housing supply system. As one of the country’s “Three Major Projects,” the development of affordable housing represents an effective approach and a crucial step toward addressing housing challenges faced by vulnerable groups and new urban residents.
As these policy measures are gradually implemented, localities have responded enthusiastically. For example, Lin’an District in Hangzhou City took the lead in issuing an announcement, planning to acquire a batch of commercial residential properties within the district for use as public rental housing—a move seen as a pioneering effort in “acquisition and storage initiatives.” Meanwhile, Kunming City unveiled a more detailed acquisition and storage plan, intending to mobilize municipally-owned state-owned enterprises to collect completed but unsold commercial residential properties for use as affordable housing. In this context, the Guangxi Department of Housing and Urban-Rural Development actively responded to the central government’s call and held a special video conference on June 20, 2024, emphasizing the need to vigorously promote the acquisition of existing commercial housing in cities at or above the county level, converting such properties into resources for affordable housing and thereby accelerating the process of destocking existing housing inventory. *Destocking: An economic term referring to the process by which a commodity or asset is sold or consumed in the market.*
As a company dedicated to providing clients with high-quality consulting services, Zeshi Consulting has always adhered to a customer-oriented approach and closely aligned itself with national policy guidelines. Particularly after the introduction of the new “517” policy and related financial measures, Zeshi actively participated in the preliminary consulting work for a key livelihood project in Pinggui District, Hezhou City, Guangxi Zhuang Autonomous Region—the project to convert existing commercial housing into affordable housing. It is reported that this project is among the first batch of initiatives included in Guangxi’s plan to acquire completed existing commercial housing for use as affordable housing. The project is located within Pinggui District, Hezhou City, which is designated as a key county (district) for rural revitalization assistance in Guangxi.
“517 New Policy”: Refers to a series of measures supporting the real estate sector introduced on May 17, 2024, by the People's Bank of China, the National Administration of Financial Regulation, and other relevant authorities. These measures include lifting the lower limit on mortgage interest rates at the national level, reducing the down payment ratio for home loans, and lowering the interest rates on housing provident fund loans. This policy aims to stimulate the real estate market and accelerate efforts to reduce housing inventory.
Pinggui District is affiliated with Hezhou City in the Guangxi Zhuang Autonomous Region. It is located in the northeastern part of Guangxi and the central part of Hezhou City, with a total area of 1,850 square kilometers and a permanent population of 390,000 people.

Pinggui District, Hezhou City, Guangxi Province
According to data compiled by relevant departments in Pinggui District, as of February 2024, the inventory of commercial residential properties in Pinggui District, Hezhou City, totaled approximately 1.3521 million square meters, with a sales absorption period of about 17.6 months. Among these, the inventory of residential commercial properties amounted to roughly 685,500 square meters, with a sales absorption period of about 10.5 months; while the inventory of non-residential commercial properties reached approximately 666,600 square meters, with a sales absorption period of about 34.3 months. The sales absorption period for property inventories in Pinggui District is notably high, placing significant pressure on local authorities to reduce inventory levels.
Faced with this situation, the Zeshi Consulting Guangxi team is working closely with the Agricultural Development Bank of China Hezhou Branch, the Pinggui District Housing and Urban-Rural Construction Bureau, and local state-owned enterprises to jointly explore how to efficiently advance the process of converting existing commercial housing into affordable housing. The project is expected to complete the acquisition of 1,301 units of existing commercial housing within 2024; these units range in size from 80 to 130 square meters. In addition, the project team has paid special attention to the location of these properties and their surrounding supporting amenities, ensuring convenient transportation and well-equipped educational, medical, and commercial facilities to achieve the goal of work-life balance.
Throughout the entire project planning process, Zeshi Consulting’s Guangxi team fully integrated the actual conditions of Pinggui District and conducted systematic, professional, and in-depth deliberations around three key objectives: the necessity of project construction, the feasibility of the proposed solutions, and the controllability of risks. Emphasis was placed on precisely, scientifically, and systematically studying and analyzing the project against the “seven dimensions”—including demand feasibility, resource assurance, engineering feasibility, operational effectiveness, financial rationality, sustainable impact, and controllable risks—in alignment with relevant policies. After thorough research and discussions, the project team ultimately completed the feasibility study report and assisted the local government in developing detailed leasing and acquisition plans as well as funds management procedures. Thanks to the solid groundwork laid in the earlier stages, the project obtained approval within just one month and secured RMB 470 million in funding from the Guangxi Branch of the Agricultural Development Bank of China. This marks the first-ever loan in Guangxi Province for a project that repurposes existing, completed commercial housing units into affordable housing. The financing support provides robust financial backing for the project’s implementation, once again demonstrating the “Zeshi Speed.” It is expected that the project will receive its first disbursement of funds this October, helping Pinggui District accelerate the process of destocking commercial housing.
Through the implementation of this project, Pinggui District will not only be able to effectively address the imbalance between supply and demand in the real estate market but also provide housing solutions for local teachers, doctors, police officers, and other public-sector employees who currently lack housing or face housing difficulties. Moreover, the project will benefit workers in industrial parks, relocated residents, families awaiting allocation of public rental housing, and migrant workers from other regions employed by local enterprises—providing them with rental options to alleviate housing challenges faced by low-income urban households, new residents, and young people. This initiative will help promote a balance between housing supply and demand and foster integrated urban-rural development. It will further enhance the housing security system, which is primarily composed of public rental housing, affordable housing, and shared-ownership housing, thereby continuously consolidating the positive momentum of economic and social development.