The impact of mortgage stress on Chinese has been huge, and some people have even gone down desperate paths. For example, a young man in Shaoxing, under the pressure of the mortgage, once chose to commit suicide by cutting his wrists in a public toilet, but was fortunately rescued by passers-by in time. There is also a young brother in Zhengzhou, because he did not repay the mortgage for four months, the house was finally foreclosed, and he hugged his head and cried on the spot. These examples show that mortgage stress can overwhelm many people when a weak economy leads to falling incomes.
Mortgages have become one of the biggest debts of ordinary Chinese people, and over the past few decades, the real estate industry has created countless rich people and landlords, but it has also made large numbers of ordinary people social animals and house slaves. So Chinese how much mortgage do you owe? How many Chinese households are paying their mortgages? How much does each Chinese family need to repay the mortgage?
According to the statistics of the central bank, by the end of 2021, the total amount of personal housing loans nationwide was 38.3 trillion yuan. According to the country's population of 1.4 billion, the per capita debt is 27,000 yuan in housing loans. However, this calculation does not make sense, because the elderly, children and homeless people are not excluded, so we need to find out how many Chinese are taking out mortgages.
Many self-media claim that there are 400 million house slaves in China, but after many inquiries, this data has no reliable source, and the official number of mortgages in China has not been released. Therefore, we can first calculate based on the data of the seventh population census that there are about 243 million urban households in China. According to the central bank's survey report on the assets and liabilities of urban households in China, 43.4% of urban households in China have housing loans. Comprehensive calculations show that the number of urban households with housing loans in China is 105 million, accounting for 38.3 trillion yuan of total housing loans. The average household needs to carry a mortgage of 364,800 yuan.
If your mortgage is below that, congratulations on having fallen below the national average. Of course, some people will say, how can your total mortgage only count urban families? Don't rural people buy houses? In fact, the so-called urban concept includes cities and county towns, rural people buy houses in urban areas and county towns, villages and towns basically do not have commercial houses, most people build their own houses there to live, so the mortgage is mainly borne by urban families.
However, it is important to note here that the total amount of 38.3 trillion yuan in mortgages does not include interest. This figure is only the principal of the mortgage owed by the people of the whole country. If you add interest, this figure basically doubles. At present, the interest rate of provident fund loans is 3.25%, and the interest rate of bank commercial loans is about 5.3%. But provident fund loans account for only 18% of the country's total housing loans, and most of the rest are bank loans. Therefore, considering the two loan interest rates and proportions, and calculating according to the common 25-year repayment time, the principal interest of 38.3 trillion yuan reached 28.52 trillion yuan.
Therefore, the total amount of housing loans that Chinese actually need to repay is 66.82 trillion yuan. Last year, the GDP of my city of Guilin was 231.1 billion yuan. If the entire GDP of Guilin is used to repay housing loans, it would take 289 Guilin cities to pay off the housing loans of the whole country, equivalent to 58% of the national GDP. On average, 105 million urban households need to repay an average of 636,400 yuan, and according to the 25-year repayment time, they need to pay 2,121 yuan per month, including 270,000 yuan in interest.
Some people say that buying a house is equivalent to renting a house with a bank for a long time. This does sound reasonable, and paying a mortgage of 2,100 yuan a month doesn't seem like much, which sounds acceptable compared to the common mortgage of 8,000 yuan or 10,000 yuan per month on the Internet. However, the reality is that the vast majority of urban families who buy houses do not settle in first-tier cities or second-tier provincial capitals, but settle and live in the vast number of third-, fourth- and fifth-tier small cities and counties. First, let's discuss it in segments. Guilin is my hometown, its GDP ranks third in Guangxi Province, and the house price is about seven or eight thousand yuan. However, the average office worker's salary level is only three or four thousand yuan, and the monthly mortgage payment of two thousand one has accounted for half of the salary. For a person, the pressure to buy a house is indeed not small. Buying a home in a big city is not easy, but it is not easy in a small city with limited job options and lower wages.
However, if you are a civil servant or work in a state-owned enterprise or public institution, then the pressure will be much less. Because of the 636,400 yuan of mortgage interest, the provident fund loan can occupy 270,000 yuan. If you can use the CPF loan in full, then the interest will be much less. What does this have to do with civil servants, state-owned enterprises and institutions? This is because these units are willing to contribute to the provident fund for their employees, while private and private enterprises rarely provide such benefits. Although China has an overwhelming majority of private and private enterprises, with more than 44 million, more than ninety percent of them are other types of enterprises and provide the majority of social jobs. However, by the end of 2020, there were fewer than 53.58 million employees in private enterprises with provident funds, while 74.2 million in state-owned enterprises, institutions and institutions with provident funds. Take JD.com, a private enterprise with the largest number of employees in China, as an example, because it does not pay five insurances and one housing fund for all employees, it has become the focus of the news. However, such news also shows that too many private companies do not contribute social security and provident funds to their employees.
In China, more than 83% of people have a provident fund, and by the end of 2020, a total of 153 million people across the country had contributed 26,200 yuan to the provident fund, an average of 17,000 yuan per person per year, and 1,427 yuan per person per month. You can calculate whether your CPF has reached the national average. However, the amount withdrawn from the CPF is much less than the amount contributed. In 2020, a total of 3.03 million provident fund housing loans were issued nationwide, totaling 1.34 trillion yuan, with an average of 440,000 yuan per loan. This means that if you use the provident fund loan to buy a house, but the loan amount does not reach 440,000 yuan, then you can only take out the provident fund to pay the mortgage. Therefore, generally speaking, the amount of provident fund loans is as much as you can borrow, after all, the interest rate of the provident fund is only 3.25%, while the interest rate of bank mortgages is generally above 5.3%.
Suppose you have a mortgage principal of 450,000 yuan, calculated according to the 25-year repayment period, the difference between the interest of the provident fund loan and the bank loan is 155,000 yuan, which is equivalent to 1/3 of the principal. However, the real problem is that nearly 83% of migrant workers in the country do not even have a provident fund, so they can only find more expensive bank loans, which also makes housing loans a source of profit for banks. According to the financial reports of the four state-owned banks, housing loans account for the vast majority of personal loan business, of which the Agricultural Bank of China has the lowest proportion of housing loans, accounting for 73% of personal loan business, while the other three state-owned banks basically have a housing loan ratio of more than 80%. By the end of 2021, the total housing loans of the four state-owned banks had reached 22.83 trillion yuan, with an average of 5.7 trillion yuan in housing loans issued by each bank. According to the 5.3% mortgage interest rate and 25-year repayment period, the four state-owned banks can earn 18.41 trillion yuan in interest on housing loans alone, and the average daily mortgage interest of each bank can reach 500 million yuan. Of course, this is only a very rough calculation that does not take into account factors such as inflation and operating costs. However, it can be seen that the real estate and banking industries have been closely linked, and once there is a problem in the real estate industry, banks will also face a huge risk shock. This is why it is often said that real estate and banking are grasshoppers on a rope, and this is why. Expensive mortgages have also led to an increase in the debt ratio of Chinese, which has long broken the habit of Chinese love to save money and not love debt.
From 2003 to 2008, China's household debt ratio was basically stable at about 18% of GDP. But since 2008, Chinese debt ratio has been soaring, reaching 72% by the end of 2021. Among them, the most important source of debt is mortgages. China's debt level is comparable to that of developed countries such as the United Kingdom, the United States, France, and Japan, and much higher than that of developing countries such as Brazil, Russia and India. It can be said that our deposits have not yet caught up with the United Kingdom and the United States, and we are no longer short of cash to catch up.
In some high-housing cities, residents' indebtedness is already much higher than the rate of deposits. Taking Shenzhen as an example, in 2021, Shenzhen residents' deposits increased by 180.5 billion yuan, while residents' loans increased by 272.1 billion yuan. This means that the people of Shenzhen have worked hard for a whole year, and they have not been able to save a dime, but have owed 91.6 billion yuan in debt, most of which is housing loans. However, the harder you work, the more mortgages you have. In first- and second-tier cities, in order to buy a house, many people not only empty six wallets for a down payment, but also use almost all of their salary to pay off the mortgage, leaving no room for life, and do not consider that there may be accidents in life.
In recent years, due to the economic downturn, the epidemic and Sino-US trade frictions, wage cuts and unemployment have become more and more frequent. For those who spend almost their entire salary on mortgage payments, once their income decreases, the unshakable monthly mortgage becomes an immediate burden. Therefore, in recent years, the words "supply cut" and "foreclosure" have appeared more and more frequently in the news. The "mortgage break" describes the tide of people who can't pay their mortgages, while "foreclosures" refer to properties that have been forcibly auctioned off by the court because they can't pay their debts.
According to the National Finance and Development Lab's 2021 China Leverage Report, the number of foreclosures in China was 500,000 in 2019 and exceeded 1.6 million in 2021. In the past, many practitioners in the Internet industry did not find it difficult to buy houses with high debts due to their young age and high salaries, and repay 120,000 mortgages every month. However, with the major adjustment of the Internet industry, many giant companies began to cut salaries and lay off employees, and the topic of supply cuts has also begun to become a high-frequency topic in the Internet industry.
The consequences of cutting off the supply are terrible. Not only does it mean that the mortgage cannot be repaid, the house is taken away and auctioned, but more frighteningly, the hard-earned money is basically wasted. Because in order to protect its own interests, no matter which repayment method is adopted, the priority repayment is mostly interest rather than principal. For example, if you take out a loan of 450,000 yuan and choose the common equal principal and interest repayment method, that is, the monthly repayment amount remains unchanged, then even if you have repaid the loan for ten years, your principal will only be repaid 80,000 yuan, and you still owe the bank 370,000 yuan in principal. Because most of the repayments in previous years were interest, the terrible thing about the interruption of the supply is this, not only the house is gone, but the money repaid before is basically wasted. Life is only a few decades, how many eight years and ten years can be wasted?
In the past nearly 20 years of economic development, real estate has indeed played the role of a pillar industry. It has promoted the development of more than a dozen industries such as steel, cement, building materials, transportation, machinery, home appliances, finance, and advertising with its own strength, and is one of the powerful driving forces of China's economy. However, we cannot deny that housing has always been about people's livelihood. Young people's dreams are not just about owning a house, and marriage shouldn't be tied up just with housing, and even a person's success shouldn't depend entirely on proof of real estate. Perhaps we will miss the time when a family of several people huddled together and lived in a small bungalow full of laughter.