On May 17, 2024, the People's Bank of China issued three important notices in succession, making major adjustments to real estate finance policies, including the down payment ratio of housing loans, commercial personal housing loan interest rates and provident fund loan interest rates. This marks a new round of major changes in China's real estate market.
First of all, the minimum down payment ratio for personal housing loans has been significantly reduced. According to the new policy, the minimum down payment ratio for commercial personal housing loans for the first home is adjusted to no less than 15%, and the second home is adjusted to no less than 25%. The introduction of this policy means that the threshold for home buyers to buy a house is further reduced, which is conducive to stimulating housing demand and promoting the stable and healthy development of the real estate market.
Secondly, the interest rate policy of commercial personal housing loans ushered in a major adjustment. The new policy abolishes the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level, and instead allows the branches of the provincial People's Bank of China to guide the self-discipline mechanism of market interest rate pricing at the provincial level in accordance with the principle of city-specific policies, and independently determine whether to set the lower and lower limits of the interest rate of commercial personal housing loans in each city within their jurisdiction according to the real estate market situation of each city within their jurisdiction and the regulatory requirements of the local government. This measure is conducive to adapting measures to local conditions, better meeting the differentiated needs of different cities, and improving the flexibility and accuracy of real estate financial policies.
Finally, the interest rate on personal housing provident fund loans has also been reduced. From May 18, 2024, the interest rate of the first set of personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be adjusted to 2.35% and 2.85% respectively; The interest rate of the second set of personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be adjusted to not less than 2.775% and 3.325% respectively. The reduction in the interest rate of provident fund loans will further reduce the loan repayment pressure of home buyers and boost market confidence.
On the whole, the launch of the People's Bank of China's blockbuster policy reflects the great importance that the central government attaches to the stable and healthy development of the real estate market and the concern for the people's housing needs. Through a series of measures such as lowering the threshold for buying a house and lowering the loan interest rate, it is conducive to stimulating the potential of housing consumption, promoting the balance between supply and demand in the real estate market, and promoting the long-term stable development of the real estate market.
At the same time, we should also see that the healthy development of the real estate market is inseparable from the strong support of financial policies, but it also requires the concerted efforts and joint efforts of all parties in the market. Under the general tone of "housing for living, not for speculation", the real estate market is entering a new stage of development, and market players should actively comply with the trend of the times, adhere to the principle of marketization and rule of law, provide more high-quality housing products, and continuously improve service quality, so as to better meet the people's yearning for a better life.
Standing at a new historical starting point, China's real estate market is ushering in an important period of opportunity for high-quality development. Under the policy framework of "stabilizing land prices, housing prices, and expectations", and under the strong protection of financial, fiscal and taxation, land and other policies, it is believed that China's real estate market will be able to achieve stable and healthy development and make new and greater contributions to the overall economic and social development.
Source: Central Bank website