Text: Luo Zeng, intern, Yu Qi
On May 17, four blockbuster policies were introduced across the country.
Yan Yuejin, research director of the E-House Research Institute, summarized the four policies as "four axes", that is, the down payment ratio for house purchase is reduced to 15%, the interest rate on provident fund loans is reduced, the lower limit of mortgage interest rates is abolished, and the acquisition of inventory housing is used as affordable housing.
Yan Yuejin said that the policy has a very strong market shock, and it will also help to further digest the inventory of subsequent new houses. In addition, it has a positive effect on this week's market transactions, next week's real estate stocks, the property market for the whole year, the boost of buyers' market confidence, and the overall improvement of the financial situation of real estate enterprises, which fully reflects the country's attention and support for the real estate market, and also fully reflects that the foundation for the good development of the housing market is continuing to increase.
"This kind of housing purchase policy is a very rare relaxation in the history of home purchases, or the most relaxed in the history of real estate development in 40 years, and its energy level exceeds all the relaxation policies in the past, and it is a historical-level housing purchase promotion policy with far-reaching impact." Yan Yuejin said.
Down payment reduced to 15%
The People's Bank of China and the State Administration of Financial Supervision and Administration issued the Notice on Adjusting the Minimum Down Payment Ratio Policy for Personal Housing Loans. According to the content of the notice, for resident households who take out loans to purchase commercial housing, the minimum down payment ratio of commercial personal housing loans for the first house is adjusted to not less than 15%, and the minimum down payment ratio for commercial personal housing loans for the second house is adjusted to not less than 25%.
Yan Yuejin said that this policy is the most relaxed down payment policy in the history of China's home purchase, which is very heavy and has a very obvious role in stimulating market transactions. In the past, the minimum down payment ratio for home purchases in the country was 20%, but there have been opposition or disagreement about continuing to reduce it. However, the down payment ratio of the mortgage has been historically lowered to 15%, which is the lowest down payment ratio in history, which is not only the most lenient policy in the history of mortgage loans, but also the most lenient policy among all kinds of home purchase policies in recent years.
"The market feedback on the policy is very strong, and compared with the relaxation of purchase restrictions in the past, the reduction of the down payment ratio is far higher than the policies of other cities. It can even be understood as one of the most lenient policies in history. Naturally, it shows that the national level attaches great importance to destocking and supporting reasonable housing consumption demand, which is of great significance for the pull of housing loans, the rapid release and large-scale release of rigid demand and improved housing, etc. This policy will have a very significant positive impact on the real estate market and real estate stocks. Yan Yuejin said.
CPF interest rate lowered to 2.85%
After announcing the reduction of the down payment ratio to 15%, the People's Bank of China once again issued the Notice on Reducing the Interest Rate of Personal Housing Provident Fund Loans. According to the content of the notice, the People's Bank of China has decided to reduce the interest rate of personal housing provident fund loans by 0.25 percentage points from May 18, 2024, the interest rate of the first set of personal housing provident fund loans below 5 years (including 5 years) and more than 5 years will be adjusted to 2.35% and 2.85% respectively, and the interest rate of the second set of personal housing provident fund loans below 5 years (including 5 years) and more than 5 years will be adjusted to not less than 2.775% and 3.325% respectively.
In this regard, Yan Yuejin said that the impact of this policy on the market is very significant, and it is an important embodiment of the new round of housing purchase policy. The reduction of the interest rate on provident fund loans has been discussed in the industry before. Especially in the case of commercial bank loan interest rate cuts, the mortgage interest rate in many places has reached the level of 3.45%. At this time, there is not much difference between the interest rate difference and the CPF loan. Therefore, it is inevitable that the interest rate of the provident fund will be reduced.
"This policy has a positive effect on the subsequent application of provident fund loans, the reduction of housing costs, and the support for housing consumption. In particular, the superimposed mortgage down payment policy will have a substantial impact on the subsequent home buyers' active entry into the market. The follow-up 'low down payment + low commercial loan interest rate + low provident fund interest rate' purchase model will be formed, which will fully contribute to the activity of the real estate sales market this year and help to comprehensively boost the recovery of the real estate market. Yan Yuejin said.
Destocking: Implementing "Purchasing instead of Building"
On May 17, the State Council's video conference on the delivery of housing was held. He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, stressed that he has a deep understanding of the people's nature and politics of real estate work, continues to adhere to city-specific policies, fights the tough battle of risk disposal of unfinished commercial housing, and solidly promotes key tasks such as ensuring the delivery of housing and digesting the stock of commercial housing.
He Lifeng pointed out that real estate is related to the vital interests of the people and the overall situation of economic and social development. At present, it is necessary to focus on classifying and promoting the disposal of commercial housing projects under construction that have been sold and difficult to deliver, fully support the financing and completion delivery of projects that should be renewed, and protect the legitimate rights and interests of buyers. The relevant local governments should proceed from the actual situation and properly dispose of the idle stock of residential land that has been transferred by means of repossession and acquisition as appropriate, so as to help real estate enterprises with financial difficulties to solve their difficulties. In cities with a large inventory of commercial housing, the government may purchase some commercial housing at a reasonable price as appropriate. It is necessary to continue to do a good job in the prevention and disposal of debt risks of real estate enterprises, and solidly promote the construction of affordable housing, the transformation of urban villages, and the construction of public infrastructure for both ordinary and emergency purposes.
In this regard, Yan Yuejin said that this meeting is highly consistent with the content of the recent rumors of acquiring new houses as affordable housing, which also shows that this is a blockbuster policy in the near future. The core point of this policy can also be summarized as "purchase instead of construction". This model responds to the central government's previous "policy measures to study and digest the stock of real estate and optimize the incremental housing", which combines the acquisition and digestion of inventory housing and the new construction of affordable housing. It organically combines the three major projects of destocking and real estate, which is in line with the laws of the market and has a very good orientation.
Yan Yuejin pointed out that the focus of such policies is on the inventory of new houses of real estate enterprises, which is conducive to the improvement of sales data and financial conditions of real estate enterprises. A series of recent data shows that whether it is the inventory data of 100 cities or the data of 70 cities across the country, it shows that the market is under pressure. The superposition of such policies, namely the down payment of 15%, the reduction of the provident fund interest rate, and the purchase and construction model, has a positive effect on the rapid improvement and development of the capital of real estate enterprises.
Abolish the national mortgage interest rate floor
After two blockbuster policies in a row, the central bank took action again.
The People's Bank of China issued the Notice on Adjusting the Interest Rate Policy for Commercial Personal Housing Loans. The content of the notice pointed out that the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level will be abolished.
Yan Yuejin said that the policy clearly canceled the lower limit of the mortgage interest rate policy means that for the purchase of housing loans or mortgage loans, there used to be a minimum interest rate requirement, but now this lower limit of the interest rate has been cancelled. In layman's terms, in the past, the minimum interest rate in some cities was 3.5%, but under the current policy, even if the price is less than 3%, it is up to the banks themselves to decide. This is also an important embodiment of the marketization of mortgage interest rates.
Regarding the difference between such policies and policies of other cities in the past, Yan Yuejin pointed out that in the past, it was the differentiated policy made by the city itself according to the housing price index and the guidance of one city and one policy, but now it is actually a unified national layout, so it is a very in-depth and systematic policy, which has a positive effect on the continuous reduction of national mortgage interest rates, reducing the cost of buying a house, clarifying market expectations, and activating market vitality.