On May 17, the official website of the People's Bank of China issued three notices in succession, mainly involving commercial personal housing loan interest rates, personal housing provident fund loan interest rates and the minimum down payment ratio of personal housing loans, including the cancellation of the lower limit of the commercial personal housing loan interest rate policy for the first and second housing at the national level, and the reduction of the personal housing provident fund loan interest rate by 0.25 percentage points.
"Three arrows at the same time", the real estate industry is hot, and some people comment on it as a "nuclear bomb blockbuster policy". Real estate stocks should be red, setting off a tide of price limits.
As of the close, only 4 of the 103 constituent stocks in the A-share real estate development sector fell, and the remaining more than ninety percent of the stock prices rose, and more than 20 shares rose to the limit, such as Greenland Holdings, Rongan Real Estate, Gemdale Group, Joy City, Vanke, Poly Development, China Fortune, etc.
Domestic real estate stocks also rose sharply, Jingrui Holdings rose 238.1%, Guangdong Gangwan Holdings, Jianye Real Estate rose more than 40%, Territory Holdings rose more than 30%, Tianyu Real Estate and Huijing Holdings rose more than 29%, Sunac China rose 25.85%, Agile rose 24.32%, Times China rose 24.24%, and Hongyang Real Estate rose 23.16%.
The bailout policy has been issued three times in a row
Different from the previous relaxation of purchase restrictions, this policy is a more far-reaching set of real estate financial "combination punches". If the relaxation of purchase restrictions lowers the threshold for consumers to "buy, buy, buy", then the reduction of down payment and interest rate is to reduce the cost of funds for everyone's "buy, buy, buy".
Specifically, the first move of the "combination punch" is aimed at commercial loans, that is, the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level.
At the operational level, the provincial-level branches of the People's Bank of China, in accordance with the principle of city-specific policies, guide the self-discipline mechanism of market interest rate pricing at the provincial level, 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 (if any) according to the real estate market situation of each city within their jurisdiction and the regulatory requirements of the local government; Banking financial institutions in accordance with the provincial market interest rate pricing self-discipline mechanism to determine the lower limit of interest rate (if any), combined with the institution's operating conditions, customer risk status and other factors, reasonable determination of the specific interest rate level of each loan.
The second trick is a provident fund loan. From May 18, 2024, the interest rate of personal housing provident fund loans will be lowered by 0.25 percentage points, and the interest rates 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, and the interest rates 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 third is the down payment ratio. For households that take out loans to purchase commercial housing, the minimum down payment ratio for 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 second houses is adjusted to not less than 25%.
On this basis, the provincial-level branches of the People's Bank of China and the dispatched agencies of the State Financial Supervision and Administration independently determine the lower limit of the minimum down payment ratio for commercial personal housing loans for the first and second houses in each city under their jurisdiction in accordance with the requirements of urban regulation and control and in accordance with the principle of city-specific policies.
On the whole, the general meaning of this set of "combination punches" is that the commercial loan institutions "look down", the provident fund loan is reduced by 0.25 percentage points, the minimum down payment ratio of commercial loans is not less than 15%, and the minimum down payment ratio of the second set of commercial loans is not less than 25%.
What is the impact on the industry
For the continuous adjustment of the above-mentioned financial instruments, Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, analyzed to the reporter of "International Financial News" that many hot cities have recently greatly adjusted the lower limit of the interest rate of the first and second home loans, as low as 3.25%. Judging from recent financial data, credit growth has changed from a supply constraint to a demand constraint, that is, insufficient demand is the main reason for restricting credit supply, especially mortgage loan delivery.
Behind this is not only the impact of fundamental factors such as household income, employment, and expectations, but also the reason for the sharp decline in the risk-free interest rate. For example, the recent bank risk-free wealth management has fallen below 3% and entered the "2 era", at this time, the bank mortgage interest rate (LPR is still 3.95%, the lowest interest rate is 3.75%) is still 3%-4%, which is very high.
It is not cost-effective to buy an asset with a falling price at a high interest rate, which also makes residents reluctant to buy a house, especially if it is leveraged. According to data, the new loans to residents in April were -516.6 billion yuan, a year-on-year decrease of 275.5 billion yuan, and a year-on-year decline for three consecutive months.
Therefore, lowering mortgage interest rates without setting a lower limit, narrowing the gap between mortgage interest rates and risk-free interest rates, and making consumers think that buying a mortgage is cost-effective, which is an important motivation to motivate residents to buy houses.
"In general, (the real estate market) has fully entered the stage of cost reduction, this cost reduction is mainly for the current real estate market supply and demand reversal, the main demand to new citizens, young people, foreign population, must be promoted from the perspective of reducing housing prices, interest rates, taxes and fees, etc., it is expected that the next step of housing transactions will be fully canceled, into the stage of releasing water and raising fish, and conserving tax sources."
In the view of Zhang Dawei, chief analyst of Centaline Real Estate, the country's determination to "save the market" has been fully reflected in the policy, and more policies will be implemented in the future, "we can be optimistic about real estate."
He said that the down payment ratio reduction refreshed the historical record, whether it is the down payment ratio or the lower limit of the interest rate, the document is adjusted to the lower limit of the national policy, from the current situation, it is expected that most places in the country will not increase the weight, will directly implement the national lower limit.
According to the simple arithmetic average calculation of the Central Plains Real Estate Research Institute, the average down payment ratio of the first house in key cities across the country was 24%, and the down payment ratio in such cities is mainly divided into three levels, namely 30% and 20%. In general, the higher the energy level of the city, the higher the down payment ratio, this time it is reduced to 15%, which means that the down payment ratio of all cities will be reduced, especially the first and second tier cities have a huge impact, Beijing and other cities will greatly reduce the down payment ratio and interest rate.
Chen Wenjing, director of market research at the China Index Research Institute, also pointed out that the central bank canceled the lower limit of the mortgage interest rate at the national level, and the favorable policy was extended to the second house, and it is expected that more cities will reduce the mortgage interest rate, and the space for the reduction of the mortgage interest rate in the first-tier and core second-tier cities is expected to open.
Some people also believe that although the policy "big move" has been made, some issues are still worthy of attention. Yu Xiaoyu, general manager of Yihan Think Tank Research Center, told reporters that there are still some groups whose housing needs are difficult to release, and the fundamental logic behind them is the lack of purchasing power and uncertainty about the future.
In addition, on whether the policy concerned by the industry has bottomed out, she said that from the current situation, the determination of the policy to save the market is strong, and there is a high probability that it will continue to follow up, although many policy adjustments do have tentative tests, but this is also blameless in theory, after all, it is necessary to decide the next move according to market feedback.
Yu Xiaoyu stressed that the existing policies are not enough to mobilize the willingness of residents to increase leverage, and the cooperation with policies such as the extension of loan terms, stable employment, and stable industries may be more effective, "the whole industry is already in the middle of the pain, and there is no need for administrative policies to exist, and residents do not have to worry, the basis for the property market to skyrocket is no longer there."