The central bank has clarified four real estate financial policies to promote the high-quality development of the real estate market

China Net Finance on May 17 Today, Tao Ling, deputy governor of the People's Bank of China, said at the regular policy briefing of the State Council held by the Information Office of the State Council that based on the positioning of the central bank's monetary policy and macro-prudential management functions, four policy measures have been introduced, including the establishment of 300 billion yuan of affordable housing refinancing, the reduction of the minimum down payment ratio of personal housing loans at the national level, the abolition of the lower limit of the national personal housing loan interest rate policy, and the reduction of the interest rate of housing provident fund loans of various maturities by 0.25 percentage points.

Industry experts said that since last year, the urban real estate financial policy has been adjusted and optimized many times, the real estate financing coordination mechanism has been implemented, and the reasonable financing needs of real estate enterprises have been gradually met. The substantial adjustment of the housing credit policy has supported the healthy and stable development of the real estate market from the demand side. It is expected that the mainland real estate market is expected to stabilize and rebound in the coming period.

It is planned to set up a 300 billion yuan re-loan for affordable housing

"In order to implement the spirit of the meeting of the Political Bureau of the Central Committee, according to the deployment of the State Council, the People's Bank of China plans to set up affordable housing re-lending as a newly created structural monetary policy tool." Tao Ling said that in accordance with the idea of "government-led and market-oriented operation", the People's Bank of China will provide low-cost refinancing funds, and 21 national banking institutions will be encouraged to issue loans to local state-owned enterprises selected by the city government in accordance with the principle of marketization, and support the acquisition of completed and unsold commercial houses at reasonable prices for use as affordable housing.

According to Tao Ling, first, the scale of affordable housing refinancing is 300 billion yuan, with an interest rate of 1.75%, a term of 1 year, and can be extended 4 times, and the target is 21 national banks. Banks issue loans in accordance with the principle of independent decision-making and assumption of risk. The People's Bank of China will issue reloans at 60% of the loan principal, which can drive bank loans of 500 billion yuan.

Second, the acquired commercial housing is strictly limited to the commercial housing that has been completed and unsold by the real estate enterprise, and the real estate enterprises under different ownership systems are treated equally. In accordance with the principle that affordable housing is used to meet the rigid housing needs of wage and salary income groups, the house type and area standards of the purchased commercial housing should be strictly grasped.

Third, the city government selects local state-owned enterprises as the acquisition entity. The state-owned enterprise and its affiliated group shall not be involved in the hidden debts of the local government, shall not be a local government financing platform, and shall have bank credit requirements and credit space, and shall be promptly placed or leased after acquisition.

Fourth, voluntary participation. The city government decides whether to participate or not based on factors such as local demand for affordable housing and the inventory level of commercial housing. Wage earners who meet the conditions for protection can choose whether to participate in the placement or leasing at their own discretion. The real estate enterprise negotiates on an equal footing with the acquirer and decides whether to sell on its own. In accordance with the principles of risk-bearing and business sustainability, 21 banks made their own decisions on whether to issue loans to the acquirer.

"This policy is an important measure issued by the People's Bank of China to support the construction of a new model of real estate development, which is conducive to achieving multiple goals through a market-oriented approach." Tao Ling pointed out that the first is to speed up the destocking of stock commercial housing. Local state-owned enterprises, with the support of banks, participate in the acquisition of completed and unsold commercial housing in a market-oriented manner, which can promote the destocking of the commercial housing market. The second is to speed up the supply of affordable housing. The acquired commercial housing is used as affordable housing for sale or rent, which can better meet the housing needs of wage and salary groups. The third is to help ensure the delivery of buildings and the "white list" mechanism. After the real estate enterprise sells the completed commercial housing, the returned funds can be used to continue the construction of the project under construction and improve the financial situation of the real estate enterprise. For the above policies, the People's Bank of China will issue an official document in the near future "Notice on Matters Related to the Establishment of Affordable Housing Refinancing".

Dong Ximiao, chief researcher of Zhaolian, said that the People's Bank of China's creation of a new structural monetary policy tool, affordable housing refinancing, has three positive effects: first, improve the enthusiasm of banks to help digest the stock of commercial housing; Second, support local governments to resolve real estate market risks, and re-lend 300 billion yuan for affordable housing, which can drive bank loans of 500 billion yuan, which is a direct and powerful support for the "destocking" of real estate in relevant cities. The third is to promote the healthy and stable development of the real estate market. The stock of unsold commercial housing is acquired, and the funds of real estate enterprises can be used to ensure the delivery of housing and other project construction, forming a virtuous circle.

Adjust the down payment ratio and interest rate level of personal housing loans

"In addition to the structural monetary policy tools to provide low-cost policy funds, the main responsibility of the People's Bank of China on real estate work is the macro-prudential management of real estate finance, focusing on the reasonable determination of the down payment ratio and interest rate level of individual housing loans." Tao Ling said.

Today, the website of the People's Bank of China issued three real estate financial policy notices in succession, involving the adjustment of the interest rate policy for commercial personal housing loans, the reduction of the interest rate of personal housing provident fund loans, and the policy of adjusting the minimum down payment ratio of personal housing loans issued by the State Administration of Financial Supervision and Administration.

The first is to reduce the minimum down payment ratio of housing loans by 5 percentage points. According to the Notice of the People's Bank of China and the State Administration of Financial Supervision on Adjusting the Minimum Down Payment Ratio of Personal Housing Loans, for resident families 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 of commercial personal housing loans for second houses is adjusted to not less than 25%.

In August 2023, according to the deployment of the State Council, the People's Bank of China unified the minimum down payment ratio policy at the national level to 20% for the first house and 30% for the second house. On this basis, each locality independently determines the lower limit of the policy according to the city's policies. At present, except for 8 cities such as Beijing, Shanghai, Guangzhou and Shenzhen, other cities have chosen to implement the national bottom line policy of 20% and 30%.

"This time, we have reduced the minimum down payment from 20% to 15% for first home loans and from 30% to 25% for second home loans at the national level. After the adjustment, the city government can still implement policies according to the city. On the basis of the lower limit of the down payment ratio determined by the city government, the commercial bank can independently determine the specific down payment ratio according to the customer's risk profile. After the minimum down payment ratio is optimized, the threshold for residents to buy a house can be lowered, which will help boost housing consumption. Tao Ling explained.

The second is to cancel the lower limit of the mortgage interest rate policy at the national level. According to the Notice of the People's Bank of China on Adjusting the Interest Rate Policy for Commercial Personal Housing Loans, the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level has been abolished. At present, the lower limit of the national interest rate policy for the first home loan is the loan prime rate (LPR) minus 0.2 percentage points, and the second home loan is LPR plus 0.2 percentage points.

Tao Ling further pointed out that this decision will no longer set the lower limit of the interest rate policy for first and second home loans at the national level. For first-tier cities and some hotspot cities, city governments can still implement city-specific policies. Decide the lower limit of the local mortgage interest rate policy. If the relationship between supply and demand in the real estate market changes greatly in the future, the People's Bank of China will resume the implementation of the lower limit of the policy in a timely manner or guide the city government to restore the lower limit of the policy and adjust the supply and demand. After the lower limit of the mortgage interest rate policy is abolished, commercial banks can independently determine the interest rate level according to the risk status of customers, so as to realize the marketization of mortgage interest rates.

The third is to reduce the interest rate of provident fund loans by 0.25 percentage points. According to the Notice of the People's Bank of China on Reducing the Interest Rate of Personal Housing Provident Fund Loans, from May 18, 2024, the interest rate of personal housing provident fund loans will be reduced by 0.25 percentage points, 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 rates 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.

According to Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, the reduction of provident fund mortgage interest rates is in line with the decline in commercial mortgage interest rates on the one hand; On the other hand, reducing the cost of housing with the provident fund will help unleash the potential of housing consumption.

Real estate is a pillar industry in the mainland, and the real estate market is related to many upstream and downstream industries, and its healthy and stable development is of great significance to the recovery of the economy. Promoting the virtuous cycle of finance and real estate is not only the need for the healthy and stable development of the real estate market, but also the need to prevent and resolve financial risks.

"On May 17, the financial management department issued three documents in a row to adjust the housing credit policy from the two aspects of housing loan down payment ratio and interest rate, which has positive significance in many aspects." Dong Ximiao said that the first is to appropriately lower the threshold for residents' housing consumption. The down payment ratio has been significantly reduced, which will better meet the demand for rigid and improved housing. The second is to reduce the burden of residents' housing consumption. The abolition of the lower limit of the national housing loan interest rate policy and the reduction of the housing provident fund loan interest rate by 25 basis points will promote the continued reduction of housing loan interest rates. The third is to send a clear signal to stabilize the real estate market. The adjustment of the housing credit policy is relatively large, exceeding expectations. Real estate looks at finance in the short term and population in the long run, and the substantial adjustment of housing credit policies will help stabilize residents' confidence in housing consumption, and then improve residents' willingness and ability to consume housing.

(Editor in charge: Wang Qingyu)