preface
Fast forward to 2022 and into 2023. With the arrival of the first spring season, the temperature is gradually rising, and the expectations of the property market for mortgage interest rate cuts are also rising. But the LPR did not change in January this past month, and the desire to cut interest rates in the housing market was dashed in the first month of 23 years, and the LPR has been stagnant for five months.
The calendar flips into February. At this time, the real estate market has revived the trend of prepayment of loans, and the voices of various media, especially official media, have gradually risen. Relevant experts have made suggestions to introduce different grades of preferential policies to adjust and reduce the quoted interest rate in the loan market, will the experts' suggestions promote the adjustment of LPR? As we all know, the purpose of LPR is to assist the market in adjusting loan interest rates.
On February 15, the PBOC released the winning bid rate for the latest one-year medium-term lending facility and reverse repo operation, the former at 2.75%, and the latter at 2.0%, both unchanged from January.
Since the winning interest rate of medium-term lending remains unchanged, it is very unlikely that LPR will decline according to the LPR price adjustment mechanism. There is a high probability that the LPR in February will not change, meaning that there is little chance of a mortgage rate cut.
Although the mortgage rate cut will not be realized in February, it is only the tip of the iceberg in the new stage of the housing market, and the undercurrent is surging under the calm ice. In order to adapt to the new stage of the property market, the central bank may make new big moves to respond.
Policy one
LPR stagnated in June, mortgage interest rates are relatively at a record high, can a new round of interest rate cuts be achieved?
The failure of mortgage rate reduction expectations has long been traced. Let's start with the current macroeconomic situation. The market generally believes that the macro economy has rebounded, and the interest rate reduction policy was introduced when the economy is running, so the current interest rate reduction policy is very unlikely to be launched.
Let's look at LPR, which is closely related to mortgage interest rates. Let's start with the 5-year LPR. In August 2022, the PBOC announced a 15 basis point cut in the 5-year LPR, bringing the revised figure to 4.3%. As we mentioned earlier, this figure has not changed for 5 months after entering 2023, and according to the basic situation of MLF in February mentioned earlier, there is a high probability that this data will not change in February, in other words, the 5-year LPR will not change for half a year.
Then there is the case of the 1-year LPR, where the central bank quotes 3.65%, although this figure is generally only stabilizing and does not show much. However, the structural support policy supporting this offer is very good, and the interest rate of corporate loans has remained low. From all aspects of the situation, mortgage interest rate cuts seem to lack a key driving force.
On both sides, although it is difficult to reduce mortgage interest rates, there is also a need for mortgage interest rate cuts. The "camera decision" feature of monetary policy is very bright in the performance of the property market. The real estate market is an important factor in the steady growth of the economy, in order to promote the recovery of the real estate market, and then promote economic growth, reducing the interest rate of residential housing loans is the key to the policy. From this point of view, there are also market and policy drivers to guide the downward adjustment of LPR quotations over 5 years.
So we will focus on the mortgage interest rate market, can the market still lower the interest rate quotation?
According to data from the source of the iceberg index, at the end of last year, the LPR data for more than 5 years was 4.3%, and the interest rate of residents' first home loans was reduced, and the national average personal housing loan interest rate issued that year was 4.26%. In longitudinal comparison, this is the lowest average mortgage interest rate in history since 2008.
However, compared horizontally with the proportion of corporate loan interest rates and housing loan interest rates in GDP growth in the same period, residential housing loan interest rates at this time were at a record high in loan interest rates.
What is the ratio of mortgage interest rates to GDP growth? In other words, there is space where money makes money, and money is made using loans. The smaller this percentage, the greater the room to make money. This figure explains last year's phenomenon: prepayment was on the rise, while profits from making money from loans declined.
Therefore, as mentioned earlier, our relative interest rate level is still at a historical high, and it is even more difficult to improve the demand for interest rate cuts in the property market. But opportunities spawned by the crisis also mean that there is still a key driver for lower mortgage rates in 2023.
Policy II
The main tone of this year's housing loan policy: differentiated housing credit, but the new stage of the housing market urges the central bank to introduce a new policy for housing loans.
The central bank has recently released frequent signals, which seem to indicate that the property market will make some big moves to cope with the new stage of the housing market. What signals are sent by central banks? Let's go back in chronological order:
First of all, on February 10, the central bank held the 2023 Financial Market Work Conference to set the tone and arrange the focus of this year's financial work. The much-anticipated interest rate cut in the real estate market was also particularly pointed out at the meeting: it is necessary to implement differentiated housing credit policies according to urban policies and increase financial support for housing leasing.
Secondly, on February 14, the official media "Economic Daily" published an article expressing support for the city-specific policy policy of the central bank meeting, which pointed out that it is necessary to reduce the cost of buying houses, release the demand for housing, and put forward many specific policy suggestions.
After talking about macro policy control, let's take a look at the specific property market situation. The current property market is very contradictory. This contradiction manifests itself in two ways. On the one hand, the purchase intention and actual actions, on the other hand, the proportion of the aforementioned mortgage interest rate in the GDP growth rate. Let's start with the former.
According to the results of the 2023 Spring Festival real estate survey conducted by Kerry, residents' willingness to buy a home is generally very strong. Up to 50% of the survey sample planned to buy a home within half a year, and this level has returned to the 2021 average; However, the transaction data of the property market is slightly bleak, and the cities with the recovery of transaction data account for only a small part, and in this batch of warming cities, only some sectors have partially warmed up, not the property market as a whole. The property market in most cities is still not improving, and it is urgent for the central bank to introduce policies and carry out differentiated and precise support.
Look at the contradiction of the latter. Let's start with the main tone of credit policy in 2023, that is, differentiated housing credit policy. The specific implementation process is as follows, such as the first home purchase has entered the 3 era. That is to say, interest rates are basically maintained at about 3.8%, this data is the mainstream, in some second-tier cities such as Nanning, Zhuhai, Shaoguan and other places, the first home mortgage interest rate can reach as low as 3.7%. The second suite is very different. Generally, 60 points are added to the 5-year LPR, that is, about 4.9%, and the data contradiction is very conflicting.
Residents were encouraged to buy homes, and demand for first homes began to adjust. Against the backdrop of stagnant LPR, a targeted rate cut in second-home lending rates for improved demand may be about to break the window. A number of banks have officially announced that the age limit for implementing home mortgage loans can be extended to 80 years old. It should be pointed out here that the extension of the mortgage age is not the "real estate market pulls the old man and the old lady down, that pension to maintain the mortgage"; This policy targets the age group of the third baby boom and leverages improved demand. Improved demand is the key to encouraging residents to buy homes.
In addition, credit policy will be a key part of the huge asset-based excess savings of middle- and high-income households, which will reduce the interest rate on the expenditure side of the liability side.
Policy III
Consumption to recover: stabilize real estate enterprises. Encourage improvement and leverage to promote a new stage of the property market
The property market will enter a new stage, and the balance of residents' assets will begin to shift from slow recession to expansion. In order for real estate to stimulate the recovery of consumption, the central bank plans to encourage the middle- and upper-income groups that contribute the most to excess savings to start increasing leverage to start improving the demand for home purchases.
The central bank released the first month's resident deposit data at the beginning of this year, according to the data released by the central bank, the overall increase in household deposits by 620 million yuan, another record high. However, we should note that although the amount of residents' deposits and savings rates are high, the increase in the total amount of residents' deposits has not greatly promoted the recovery of consumption, and weak consumption is still a recognized economic situation. Why?
From a macroeconomic point of view, "deposit" and "saving" are two different things. The total amount of savings increases, and with it, a large amount of excess savings accumulates. There are two kinds of excess savings, one is called consumption type and the other is called asset type, and it is the former that promotes the recovery of consumption.
The former can be converted into consumption stimulation market in a period of time, but this type of excess savings is mainly concentrated in 20 years, which means that the excess savings brought by our increase in savings are mainly asset-based, which reflects that more of the new excess savings brought by high-income groups are brought by the side. According to the report of relevant data agencies, the disposable income of residents is divided into five classes, and the high-income group and the upper middle group station account for 70% of the new savings.
And why is the asset-based excess saving so much greater than the consumption type? This is because of asset allocation adjustments. In the past 22 years, the overall decline of the real estate industry and the decline in financial asset prices have combined to greatly affect the composition of residents' assets.
epilogue
Residents have adjusted their asset structure, which is manifested in tightening debt and reducing unnecessary consumer spending. In real estate, it is reflected in the decline in residents' desire to buy houses, redeem financial management, and plan to reuse them for the purchase of real estate or other investments. Therefore, real estate recovery is very key to stimulating consumption, which can stabilize residents' assets and effectively enhance residents' consumption propensity.
Today's topic: In order to adapt to the new stage of the property market, the central bank released a "big move", will the mortgage interest rate be reduced in a short period of time