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In yesterday's article "The signal is coming, a new round of regulation is on the way~", we mentioned that "combined with last week's reduction in fixed deposit interest rates, it may create space for the next LPR interest rate and loan interest rate reduction." ”
The news of the interest rate cut came early this morning, and this rate cut is linked to the "countercyclical adjustment" mentioned by the top management, so there may be a "surprise" when the latest LPR is announced a week later.
I丨Early release of interest rate cut expectations
This rate cut is special.
In the past, if the central bank cut interest rates, it would be reflected when the one-year MLF was renewed on the 15th of each month, and on the 20th of the same month, the LPR would rise or decrease according to the magnitude.
The action of this interest rate cut is to transmit the signal of interest rate cut through the "7-day reverse repurchase", firstly, to match the recent "counter-cyclical adjustment" speech of the central bank governor, extraordinary means, and secondly, it also shows the urgency of this interest rate cut, the performance of the market is in the eyes, at this time to give the weak market some love in advance.
This morning (June 13), the PBOC issued the "Open Market Business Transaction Announcement" (No. 114), announcing that today's 7-day reverse repurchase winning bid rate is 1.9%.
As of August 15, 2022, the indicator has remained unchanged at 2.0% for the past ten months.
At the time of the last adjustment, both MLF and LPR cut interest rates that month (in August last year, the 5-year LPR rate fell by 15 basis points in one fell swoop from 4.45% in July), and under the intensive loose public opinion in June, a 10 basis point rate cut this month is almost certain.
Based on the expression of "counter-cyclical adjustment", there is also a possibility of "asymmetric interest rate cut" this month, that is, a one-year LPR cut of 10 basis points and a five-year reduction of 15 basis points, specifically to treat the cold of the property market.
Looking at the general trend, the five-year LPR has cut interest rates six times in the past four years, and seven times this month.
But this strength is still not enough, the 08 and 14 years of interest rate cuts are completed in a cycle of less than a year, and now the frequency and strength of interest rate cuts are at most scratching, and if the economy is to be effective, the determination to maintain a stable property market should be firmer.
With this month's interest rate cut, the Xi'an mortgage interest rate, which has not changed for a long time, will also change.
If the interest rate is cut by 10 basis points, the first home loan in Xi'an will be reduced to 4%, and the second home loan will be 4.8-4.9%;
If the interest rate is cut by 15 basis points, the first home loan in Xi'an will fall below 14, reaching 3.95% for the first time, and the second home loan will be 4.75-4.85%.
The blockage point in the property market is not cutting interest rates
Interest rate cuts are a good thing, a direct means to reduce the cost of capital use, and can promote everyone to consume and buy houses.
However, since the third quarter of last year, loan interest rates, especially housing loans, have entered the bottom, compared with the first set of high interest rates of 5.88% two years ago, the interest rate around 14 is already very sincere.
But have you found that the sales volume of the property market at low interest rates is not as good as in the era of high interest rates.
The interest rate cut at this stage is neither the icing on the cake, nor is it a blessing, to dredge the current blockage of the property market, it is impossible to achieve the interest rate cut alone.
There are three blocking points visible to the naked eye:
First, the pressure on existing loans remains high, and reconsumption is under pressure.
From the above figure, it is clear that the first half of 2018-2022 is the high point of interest rates, but nearly 63 million sets of commercial houses were sold during this period (the total sales volume during the period was 120 square meters), corresponding to tens of millions of families tied up with high interest rates.
And with the arrival of delivery, the increase in many houses cannot even cover the mortgage interest rate, and it will not be sold for a while, and for social consumption, demand is seriously compressed.
Picking up such data, it is not difficult to understand why so many people have called for discounts on stock interest rates.
In the past, families standing guard at high interest rates could only reduce mortgage interest rates by cutting interest rates again and again.
For example, if a 10 basis point rate cut is tentatively scheduled for June 20, existing mortgages can also enjoy a 10 basis point rate cut starting on the "next pricing day". As for the "next pricing day", it depends on the agreement between you and the central bank in the loan contract, which is usually January 1 of the following year, or the loan date.
As for discounting the stock interest rate, do you think banks can be willing now?
However, I heard that Xi'an's recent business transfer has shown signs of restarting, and everyone patiently waited for the official announcement. Of course, this is also a kind of directional relaxation, don't make fun without a provident fund, and it has nothing to do with you.
Second, the liquidity of second-hand housing has begun to shrink again, and the replacement cost is quite high.
Take Xi'an, where it is located, for example, the posture of entering 2023 is very correct, and there was even a 50%+ month-on-month surge in February and March, and the transaction volume of second-hand houses in March rushed to 12,151 sets, ushering in a new high since public data.
During this period of time, the popularity of new houses has also ushered in an upward trend, and the number of thousands of people shaken and the deconversion rate in February and March have performed well.
This also proves once again that second-hand housing is a prerequisite for the stability of the property market, and only by selling the second-hand housing in hand can there be incremental demand in the new housing market.
With the seven-year purchase restriction + the reduction of the number of people settled, the Xi'an property market now has to rely on "domestic demand" to drive.
Immediately, the transaction volume of second-hand houses fell in April and May, and new houses also lost momentum, channels, discounts, and developers began to roll again.
The core of the rescue is to lift up second-hand housing, and active second-hand housing transactions can reactivate property market expectations in addition to bringing stable incremental demand.
Third, the core policy has not been relaxed.
First-tier cities, Xi'an too, really want to play the policy card, the core area of the purchase restrictions, loan restrictions, sales restrictions have a lot to do.
The rate cut is just the beginning
In fact, in addition to the release of interest rate cuts today, a wave of "first-tier cities + megacities" urban village transformation is also brewing, is this a restart of shed monetization, we may as well let the bullet fly again, but Xi'an's demolition and reform this year is much greater than in previous years.
In the outflow plan, villagers and residents involved in demolition and reform will still get a lot of resettlement cash, which will undoubtedly generate a part of demand + purchasing power, and the original tight supply and demand contradiction area will usher in a wave of demolition and relocation through urban reform.
Coupled with the possible "big moves" in the later stage, once the expectation is established, the market will soon react.
In the turning period of the policy, it is already chaotic, and it is inevitable that there will be discordant voices during the period, and even hope that house prices will plummet, so that the middle-class debt will be overnight.
But the more trolls there are, the more opportunities there are. There are still too many people who can't understand real estate and the Chinese economy.
So despite a lot of scolding, we will still pay close attention to changes at this stage, from top-level attitudes, to real-time policies, to market prices. After the general policy is relaxed, once the transaction data of local cities rebounds in 2-3 months, the market is likely to come, which area to buy, which real estate to buy, this needs to do homework in advance.
The time difference is the most valuable resource of this era. The same is true for the property market, where the core assets are preemptively laid out before most people change their expectations and mentality, and wait for the market to fully recover. And people who can only complain may still be struggling with whether to start.