Text: Zhou Mingyi, editor of Tsinghua Financial Review
On the afternoon of May 17, the official website of the People's Bank of China issued three notices: "Notice of the People's Bank of China on Adjusting the Interest Rate Policy of Commercial Personal Housing Loans", "Notice of the People's Bank of China on Reducing the Interest Rate of Personal Housing Provident Fund Loans", and "Notice of the People's Bank of China and the State Administration of Financial Supervision and Administration on Adjusting the Policy of Minimum Down Payment Ratio of Personal Housing Loans".
The central bank's "three arrows" to stabilize the property market: reduce the interest rate of housing provident fund loans and reduce the proportion of down payments
The central bank announced that it will reduce the interest rate of personal housing provident fund loans by 0.25 percentage points from May 18, and in addition, the central bank will also cancel the lower limit of the interest rate policy for commercial personal housing loans for first and second houses at the national level.
The People's Bank of China and the State Administration of Financial Supervision and Administration jointly issued a notice. The notice proposes that 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 will be adjusted to no less than 15%, and the minimum down payment ratio for commercial personal housing loans for second houses will be adjusted to not less than 25%.
Lower the down payment ratio
At noon on May 17, the People's Bank of China and the State Administration of Financial Supervision and Administration jointly issued a notice.
The notice proposes that 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 will be adjusted to no less than 15%, and the minimum down payment ratio for commercial personal housing loans for second houses will be 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.
It is worth noting that, according to the notice issued in September last year, the central bank requires that 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 not less than 20%, and the minimum down payment ratio for commercial personal housing loans for second houses is not less than 30%.
Reduction of interest rates on provident fund loans
The People's Bank of China issued a notice on lowering the interest rate of personal housing provident fund loans, starting 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 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.
Removal of the lower limit on interest rates for first and second home loans
The People's Bank of China issued a notice on adjusting the interest rate policy for commercial personal housing loans. It mentions 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.
According to the notice, in order to implement the decisions and arrangements of the CPC Central Committee and the State Council, adapt to the new changes in the supply and demand relationship of the mainland real estate market, the new expectations of the people for high-quality housing, and promote the steady and healthy development of the real estate market, the relevant matters concerning the adjustment of the interest rate policy for commercial personal housing loans are hereby notified as follows:
1. Abolish the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level.
2. Each provincial-level branch of the People's Bank of China, in accordance with the principle of city-specific policy, guides the self-discipline mechanism of market interest rate pricing at the provincial level, and independently determines 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) in accordance with the real estate market situation of each city within their jurisdiction and the regulation and control requirements of the local government.
3. Banking financial institutions shall, in accordance with the lower limit of interest rates (if any) determined by the self-discipline mechanism of market interest rate pricing at the provincial level, reasonably determine the specific interest rate level of each loan in combination with the operating conditions of the institution, customer risk status and other factors.
Liu Aihua, spokesman of the National Bureau of Statistics, chief economist and director of the Department of Comprehensive Statistics of the National Economy, said that from the main data in the real estate field in April, real estate continues to be in a period of adjustment. In the next stage, it is necessary to combine the new changes in the supply and demand relationship of the real estate market and the new expectations of the people for high-quality housing, coordinate the study of policies and measures to digest the stock of real estate and optimize the incremental housing, and pay close attention to building a new model of real estate development to promote the high-quality development of real estate.
The central bank and the Ministry of Housing and Urban-Rural Development stated that they will do a good job in supporting policies for ensuring the delivery of housing
Dong Jianguo, Vice Minister of the Ministry of Housing and Urban-Rural Development, put forward the key points of the work of ensuring the delivery of housing at the meeting, first, to do a good job in the battle of ensuring the delivery of housing in commercial housing projects and to prevent and deal with the risk of unfinished work. In accordance with the principles of marketization and rule of law, classify and dispose of commercial housing projects under construction that have been sold but not delivered, promote the construction and delivery of projects, and effectively protect the legitimate rights and interests of home buyers.
The second is to further play the role of the coordination mechanism of urban real estate financing to meet the reasonable financing needs of real estate projects. The city government promotes the projects that meet the conditions of the "white list" to "make every effort to advance", and commercial banks "lend as much as possible" to the projects that comply with the "white list" to meet the reasonable financing needs of projects under construction.
The third is to promote the digestion of the stock of commercial housing. The city government adheres to the principle of "purchasing according to demand", and can organize local state-owned enterprises to purchase a part of the stock of commercial housing at a reasonable price for use as affordable housing.
Fourth, it is necessary to properly dispose of and revitalize the stock of land. At present, the stock of land that has not yet been developed or has been started but not completed shall be properly disposed of and revitalized through government recovery and acquisition, market circulation and transfer, and continued development of enterprises, so as to promote real estate enterprises to alleviate difficulties and reduce debts, and promote the efficient use of land resources.
In the next step, we will work with relevant departments to conscientiously implement the spirit of the meeting of the Political Bureau of the Central Committee, in accordance with the deployment requirements of the State Council, earnestly do a good job in ensuring the delivery of housing, promote the timely delivery of the project, and effectively protect the legitimate rights and interests of buyers.
Tao Ling, Deputy Governor of the People's Bank of China, mentioned that the People's Bank of China will step up serious implementation and launch the following four policy measures based on the central bank's monetary policy and macro-prudential management functions:
The first is to set up a 300 billion yuan re-loan for affordable housing. Encourage and guide financial institutions to follow the principles of marketization and rule of law to support local state-owned enterprises to purchase completed and unsold commercial housing at a reasonable price for placement or rental affordable housing, which is expected to drive bank loans of 500 billion yuan.
The second is to reduce the minimum down payment ratio of personal housing loans at the national level, adjusting the minimum down payment ratio for the first home from no less than 20% to not less than 15%, and the minimum down payment ratio for the second home from no less than 30% to not less than 25%.
The third is to cancel the lower limit of the interest rate policy for personal housing loans at the national level. The interest rate of the first home and the second home loan will no longer set the policy lower limit, and the mortgage interest rate will be marketized.
After the adjustment of the above-mentioned down payment ratio and mortgage interest rate policy, all localities can independently determine the minimum down payment ratio and the lower limit of the mortgage interest rate for the first and second homes in their jurisdictions according to the city's policies, and may no longer set the lower limit of the interest rate.
Fourth, the interest rate of housing provident fund loans of various maturities was lowered by 0.25 percentage points. After the adjustment, the interest rate of the personal housing provident fund loan for the first house of more than five years is 2.85%, which can better meet the housing needs of the housing provident fund depositors.
In the next step, the People's Bank of China will continue to conscientiously implement the decisions and arrangements of the Party Central Committee and the State Council, guide financial institutions to implement policies in accordance with the principles of marketization and rule of law, promote the construction of a new model of real estate development, and promote the high-quality development of real estate.
On the issue of "fighting the tough battle of ensuring the delivery of commercial housing projects", Dong Jianguo, vice minister of the Ministry of Housing and Urban-Rural Development, said that first, it is necessary to take the protection of the legitimate rights and interests of home buyers as the fundamental starting point and end point, and adhere to the principles of marketization and rule of law. We will adhere to the people-centered development philosophy, take multiple measures at the same time, classify and dispose of, do a good job in the battle of ensuring the delivery of commercial housing projects, prevent the risk of unfinished, and promote the delivery of projects on time and with good quality, so that the people can get the houses that have passed the acceptance as agreed in the contract. For those who are still unable to deliver the house after exhausting all means, those who should take the judicial route should take the judicial route, and the protection of the legitimate rights and interests of the buyer should also be put in the first place in the judicial disposal.
Second, it is necessary to make full use of the urban real estate financing coordination mechanism and include the project in the "white list" to provide financing support. In January this year, the Ministry of Finance, together with the State Administration of Financial Regulation, jointly issued the Notice on the Establishment of an Urban Real Estate Financing Coordination Mechanism to guide all localities to establish an urban real estate financing coordination mechanism, and put forward a "white list" of real estate projects that can be given financing support, and push it to commercial banks within their administrative regions to support the financing and construction delivery of real estate projects under construction. 297 cities at and above the prefecture level across the country have established a real estate financing coordination mechanism, which should play a strong role in leading and coordinating the delivery of housing.
Third, it is necessary to consolidate the responsibilities of local governments, real estate enterprises, and financial institutions. First, local governments should assume territorial responsibilities and promote the coordination and cooperation of departments and courts such as housing and construction, financial management, public security, natural resources, and auditing, so as to perform their duties and form a joint force. Second, real estate enterprises should assume the main responsibility, formulate a "one project, one policy" disposal plan, actively dispose of assets, raise funds from multiple parties, and ensure that the project is delivered on time and with good quality. Third, financial institutions should implement the provisions on due diligence and exemption from liability, so as to "fully lend" eligible projects, speed up loan approval and issuance, and support project construction and delivery.
This article is edited by Zhou Mingyi
Editor-in-charge丨Ding Kaiyan, Lan Yinfan
Preliminary trial丨Xu Lanying
Final Review丨Zhang Wei
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