China-Singapore Jingwei, May 19 Topic: Real estate policies are being launched at the same time, and the property market has entered the stage of "cost reduction".
Author: Li Yujia, Chief Researcher, Guangdong Provincial Housing Policy Research Center
The central bank, the State Administration of Financial Supervision and Administration and other departments issued three notices in a row on the 17th, and the real estate market welcomed a blockbuster. What are the highlights? What is the impact on the real estate market?
Reduce the cost of buying a house from multiple angles
The website of the central bank issued three notices in a row, canceling the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level; The interest rate of personal housing provident fund loans will be lowered by 0.25 percentage points, and the minimum down payment ratio for 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 the second house will be adjusted to no less than 25%.
From the background of policy adjustment, recently, many hot cities have significantly adjusted the lower limit of the interest rate for the first and second home loans, and some have been as low as 3.25%. Judging from recent financial data, credit growth has shifted from a supply constraint to a demand constraint. Behind this, there are not only fundamental reasons such as residents' income and expectations, but also reasons for the sharp decline in the risk-free interest rate. For example, the bank's risk-free wealth management has fallen below 3% recently. At this time, the bank mortgage interest rate is still 3%-4%, which is very high. This has also led to a weakening of residents' willingness to buy a house, especially a decrease in their willingness to buy a house with leverage. Therefore, lowering the mortgage interest rate without setting a lower limit, so that the gap between the mortgage interest rate and the risk-free interest rate is narrowed, can make residents feel that the mortgage is cost-effective in terms of cost, which is an important motivation to encourage residents to buy a house.
Lowering the interest rate on loans means lowering the monthly payments, especially after the lower limit of the interest rate is not restricted, and the monthly payments for residents to repay the loan may be significantly reduced. Coupled with the obvious decline in current housing prices, the future monthly payment has become "affordable" for many people. This has a great incentive effect on young people and new citizens to buy houses. Judging from the data since 2023, this part of the home buying group is mainly based on rigid demand, mainly buying second-hand houses, which is of great significance for promoting the circulation of new and second-hand houses, removing inventory and listings, activating transaction sentiment, and stabilizing the price system.
The Politburo meeting held on April 30 has made it clear that "it is necessary to flexibly use policy tools such as interest rates and reserve ratios to increase support for the real economy and reduce comprehensive social financing costs". The central bank has released blockbuster benefits one after another, and the specific effect on the property market depends on how the implementation level of banks is implemented, and it is expected that the RRR and interest rate cuts will be promoted one after another.
Since May 18, Guangzhou, Suzhou, Hefei, Chengdu, Jiangxi and other places have simultaneously lowered the interest rate of housing provident fund loans. In general, the property market has fully entered the stage of cost reduction. Cost reduction is mainly aimed at the reversal of the current supply and demand relationship in the real estate market, and the main demand subject has shifted to new citizens, young people, and foreign population, so it must be promoted from the perspective of reducing housing prices, interest rates, and taxes, so that new citizens can realize their housing dreams, and then repair the industry and market momentum, and restore the momentum of domestic demand.
Do a good job of "guaranteeing the delivery of housing" to prevent the spread of risks
In addition to the continued easing of credit policies, there are also strong support measures to support state-owned enterprises in acquiring commercial housing, revitalizing the stock of land, and ensuring the delivery of buildings. On the 17th, the Information Office of the State Council held a regular briefing on the policies of the State Council (hereinafter referred to as the "briefing") to introduce the relevant policies for the work of ensuring the delivery of housing. It is proposed to set up a 300 billion yuan re-loan for affordable housing, encourage and guide financial institutions to support local state-owned enterprises to purchase unsold commercial housing at a reasonable price in accordance with the principles of marketization and rule of law, and use it as affordable housing for sale or rent, which is expected to drive bank loans of 500 billion yuan. Among them, the deployment of the work of guaranteeing the delivery of housing deserves special attention, especially the first proposal to fight the battle of ensuring the delivery of commercial housing projects to prevent the risk of unfinished.
From the background of the deployment of the work of guaranteeing the delivery of housing, first, in the process of promoting the delivery of buildings, ensuring the delivery of housing, and solving the problems of key real estate enterprises, the state is actively improving the system and mechanism, building a long-term mechanism, and especially emphasizing that there can be no new delivery risks. Second, the recent market has seen a certain downturn, or caused trouble to market expectations, which may also lead to the market's expectation of "difficult delivery", which in turn will lead to a tight capital chain of real estate enterprises, which will be difficult to deliver, and will eventually lead to a new round of pressure and risk contagion, so the current work of ensuring delivery is particularly important.
However, it should be noted that the guarantee of delivery of housing is not a bottom-up plan, but the implementation of the principle of classified disposal. The briefing particularly emphasized the principles of marketization and rule of law to promote classified disposal. On the one hand, for those whose funds can be balanced (or there is a follow-up value of goods to start, or there is a balance of other projects, or the recovery of funds, etc.), or they are included in the "white list" to provide financing support to ensure that the rights and interests of financial institutions are protected. On the other hand, if the "exhaustive means" cannot achieve the balance of funds, the insolvent project must enter the judicial disposal procedure, and the bankruptcy of the bankrupt and the reorganization of the reorganization cannot force the financial institutions to provide credit support, and finally damage the rights and interests of the financial institutions. That is, to do their best and do what they can, all parties should implement the main responsibility, especially the main responsibility of the housing and construction sector and the financial sector, to ensure that the project is qualified to the greatest extent, the funds can be balanced, and the "should be advanced" and "should be loaned to the fullest". Where it is truly impossible to do so, the principle of rule of law is to be implemented.
For the work of guaranteeing the delivery of housing, special attention should also be paid to the real estate financing coordination mechanism. The real estate financing coordination mechanism is not only a new model and a long-term mechanism for real estate management, but also the most important starting point for promoting the delivery of housing. The biggest feature is that it can effectively isolate the enterprise risk and the project risk, and take the specific project as the carrier, so that the territorial responsibility of the city government, the main responsibility of the real estate enterprise, and the responsibility of the reasonable financing needs of the bank to be met can be implemented through the financing coordination mechanism. Specifically, it is to take the establishment of a "white list" of projects as an opportunity to strengthen the cooperation between the housing and construction departments and the financial sector, consolidate the two-way linkage mechanism of "push-feedback" and "delivery-use-recovery", and promote the transformation of more projects into compliant projects as much as possible, so as to realize the project "should be advanced" and "should be loaned to the fullest", which is an important path to fight the tough battle of ensuring the delivery of commercial housing projects. (Sino-Singapore Jingwei APP)
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Editor in charge: Zhang Zhihan