"We have worked hard for more than ten years, saved hundreds of thousands of down payments, and paid millions of monthly debts, in order to buy a small house of 70 square meters?" This is the voice of many young people when they buy a house. They worked hard to save money, went into debt to buy a house, and most of their monthly salary, plus overtime pay, were used to pay off the mortgage, and their quality of life was worrying.
On 17 May, the central bank announced that it would lower the interest rate on personal housing provident fund loans and cancel the lower limit of the interest rate on commercial loans for the first and second houses in the country. What's even more exciting is that the minimum down payment ratio is adjusted to: no less than 15% for the first house and no less than 25% for the second set.
This is considered to be the most lenient down payment policy in the history of China's home purchases, far exceeding the level of any previous favorable property market policy. Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Urban Planning Institute, said that after the implementation of these policies, the monthly payment of many home buyers will be significantly reduced, and it is expected to change from "unpayable" to "affordable".
In fact, the house-price-to-income ratio has always been a key factor restricting young people in big cities from buying houses. Taking Shenzhen as an example, according to the estimation of Shenzhen's per capita disposable income of 65,000 yuan and housing prices of 60,000 yuan per square meter in 2022, ordinary families need more than ten years of income to buy a 60-square-meter house. High down payments and high interest rates have exacerbated the burden on home buyers, especially young people, and hindered the vision of a home to live in.
What does the New Deal mean? What tangible benefits will it bring to young people?
Taking Shenzhen as an example, a new house of 80 square meters has a total price of 4.8 million yuan. According to the minimum down payment ratio of 15% of the new deal, the down payment is only 720,000 yuan, which is 160,000 yuan lower than the original 20% down payment. Assuming that the repayment method of equal principal and interest, the annual interest rate of the loan is 5.3%, and the loan term is 30 years, the monthly payment under the new policy is about 16,275 yuan, which is about 1,100 yuan lower than the original monthly payment.
It can be seen that the new policy has brought considerable burden reduction to home buyers, not only improving the ability to buy houses, but also freeing up more space for future monthly payments. This is undoubtedly a major positive for the majority of home buyers, especially for young people and new citizens.
Experts pointed out that the new policy has promoted a virtuous cycle in the new and second-hand housing markets, which will help to destock, increase transaction volume and stabilize housing prices. Young people will no longer be overwhelmed by the burden of life because of "housing is safe", the structural threshold will be gradually cleared, and their dream of "housing is hopeful" will gradually come true.
The new policy can also stimulate household consumption. Li Yujia of the Guangdong Urban Planning Institute said that after the monthly payment is significantly reduced, many people will free up more money for other aspects, which is crucial to stimulate consumer demand and promote economic development.
Of course, although the new policy is good for home buyers, it may also bring some hidden concerns. For example, it may lead to a rise in housing prices in some cities and exacerbate the risk of real estate speculation in some hot cities. Therefore, it is necessary to maintain the continuity and pertinence of the policy, adhere to the tone of "housing for living, not speculation", and prevent excessive speculation in the market.
The new policy has released a positive signal of stabilizing the property market and helping home buyers with unprecedented strength, which can be called the biggest policy benefit in the history of China's home purchase. It will surely benefit the majority of home buyers, especially the young people who have been hindered by "unable to pay the down payment and the mortgage loan" for a long time, and help them realize the "dream of living in peace" as soon as possible.