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On May 17, the People's Bank of China, the State Administration of Financial Supervision and Administration, the Ministry of Housing and Urban-Rural Development and other departments announced a series of heavy policies: abolishing the lower limit of the mortgage interest rate policy, lowering the provident fund loan interest rate and the minimum down payment ratio of the housing loan; set up a new 300 billion yuan of affordable housing refinancing; "Organize local state-owned enterprises to purchase a part of the stock of commercial housing at a reasonable price for use as affordable housing", "properly dispose of the idle stock of residential land that has been transferred by means of repossession and acquisition as appropriate, and help enterprises solve their difficulties", and so on.
Affected by this, 100 A-share real estate stocks rose on the same day, and more than 20 stocks such as Vanke and Poly Development rose to the limit, and this rally continued to this day (May 20), but Vanke's share price closed higher after a sharp shock today, which also shows that the market is optimistic about the overall policy at the same time, there are still differences in views on its stimulus effect. At the same time, data from Centaline Real Estate shows that on the first weekend (May 18-19) after the "517" property market new deal, the average daily transaction of second-hand houses in Beijing exceeded 1,000 units again, basically reaching the heat of Xiaoyangchun in 2024 - the policy stimulus effect can also be glimpsed.
Although real estate ushered in the most important policy combination in history, can 300 billion successfully leverage the market? When will the market really move smoothly? Fortune Plus users have had a wonderful discussion on this topic, and we have selected some of them as follows:
Zhu Xiao
Derivatives Finance Department of a brokerage
In all bailout policies, the direct action of the government's financial or monetary authorities is always the ultimate killer move. This means that the inherent demand of the market is stimulated by loosening, unblocking, and reducing the burden has had limited effect, and only the public sector on behalf of all citizens can directly stimulate demand with incremental funds outside the market at the cost of explicit taxes or seigniorage, so as to effectively solve the problem of "market failure".
It has been almost three years since the real estate dilemma broke out, during which various "market-oriented and rule-of-law" measures have been introduced, but the real meaning of the bailout may not be launched until 2024. More than half a year ago, there was a similar voice, "It may not be enough to force the developer to ensure the delivery of the property by itself, and it may make sense for the finance to pay for the local government to buy out the unfinished building to ensure the delivery of the building." "Moral hazard aside, this solution is also difficult, and the core question is who pays the bill? The bailout fund is not blown by the wind, it also has a cost, and the cost is not reflected in the explicit will be reflected in the hidden, and if it is not reflected in the near future, it will be reflected in the long-term.
Local finances have long been accustomed to living a tight life, and it can even be said that the more difficult the real estate in a certain place, the more likely the local finances of the place will be tighter, and the greater the pressure of hidden debts, the more there will be no surplus food to support themselves. This time, the policy layer has given a truly operable solution path. On the one hand, the fiscal and taxation policy acts on the repurchase of land, and the source of funds is local government special bonds, and on the other hand, the monetary policy acts on the acquisition of finished houses, and the source of funds is base money creation. If compared with the current scale of sluggish assets and liabilities accumulated in real estate, 300 billion yuan does not seem to be sufficient. But this may be an "appropriate" starting figure, and the direct funds for the A-share bailout in the first quarter are almost more than 300 billion.
New weapons have been taken out of the toolbox, and restraint in the initial dose is understandable. People who were overly pessimistic before can ease some expectations; And people who are overly optimistic at the moment don't have to. Outsiders who have not really been involved in real estate-related economic activities may always be inclined to underestimate the extent of the crisis facing the industry. Although it has been difficult for the third or fourth year, the sales of the whole industry are still falling and falling, and the inventory is rising. In May, when the real estate ETF was in full swing, two tenacious self-saving original 100 billion-level real estate companies were still falling, Guangdong's Agile announced its bond default for the first time, and Jiangsu's Zhongnan Construction received a delisting notice. (See more "Real Estate Ushers in the Most Blockbuster Policy Mix in History, Can 300 Billion Leverage the Market?") >> Wonderful interpretation)
Zhong Zhengsheng
Chief Economist of Ping An Securities
Real estate is still "grinding the bottom". Real estate investment fell further to -10.5% year-on-year in April, and the prices of new and second-hand homes in 70 large and medium-sized cities fell by 0.6% and 0.9% month-on-month respectively, both hitting new highs since 2015. The area of real estate for sale in the country has reached 746 million square meters, which has surpassed the high set in February 2016. Real estate is showing a "double contraction of supply and demand", and the decline in housing prices and sales form a negative cycle. The latest policy mainly makes arrangements from three aspects: continue to promote the "guaranteed delivery of buildings"; Started to push for "destocking"; Reclamation of sold land is permitted.
There are still several issues to be clarified to promote the destocking of real estate and the stabilization of the real estate market: 1. The amount of funds required for real estate "collection and storage" may be greater. We estimate that assuming that all localities purchase and store according to the average price of second-hand housing, and the goal is to pull the inventory removal cycle back to the upper limit of a reasonable range, then the residential inventory that needs to be "collected and stored" within a year will reach nearly 16 million square meters, corresponding to the required collection and storage funds of 2.7 trillion yuan. If the increase in the number of second-hand residential listings is taken into account (which will squeeze new home sales), the scale of funds required will be larger, and the amount of 300 billion yuan of affordable housing refinancing funds launched this time may be insufficient. 2. There may be differences between the distribution of real estate inventory and the distribution of affordable housing demand. Third- and fourth-tier cities have the highest urgency to rely on "storage and storage" to solve problems, while first-tier cities have the lowest. However, from the perspective of population inflow and industrial support, the demand for affordable housing in first- and second-tier cities is bound to be greater. This mismatch may affect the effectiveness of the "destocking" policy. 3. Financial support is particularly necessary, and how to balance project revenue and expenditure is the key. Taking into account operating costs, vacancy rates and rental returns, the operating income of affordable housing may not be able to cover the interest costs of loans. The resumption of the acquisition of the stock of land that has been started but not completed by the local government is also related to the issue of the source of funds of the local government. This may need to be addressed in the context of a new round of fiscal and taxation system reform.
In terms of economic data, production in April was better than investment, which is conducive to the recovery of capacity utilization; Domestic consumption is still on the recovery track, helping the industrial production and sales rate to rebound to 97.4%; The growth trend of foreign demand and exports has been relatively good, which has played an important role in the steady growth of China's economy. However, the recent external economic and trade environment has been under pressure, adding uncertainty to the sustained and rapid growth of exports in the second half of the year. At present, the downward pressure on the economy is mainly concentrated in the real estate sector, followed by the slowdown in the growth of infrastructure and manufacturing investment, and the suppressive effect of the decline in capacity utilization on manufacturing investment has been reflected. The "destocking" of real estate requires greater policy efforts, and fiscal policy needs to be accelerated. (See more "Real Estate Ushers in the Most Blockbuster Policy Mix in History, Can 300 Billion Leverage the Market?") >> Wonderful interpretation)
谭浩俊
Financial commentator
As long as the new deal for the property market is introduced, some experts will jump out and say that there are many benefits, and they feel that the people have picked up a lot of cheapness. Only in terms of the central bank's reduction of the minimum down payment ratio of the first home loan to 15%, Yan Yuejin, research director of the E-House Research Institute, said for example, that in the past, the highest down payment ratio in Shanghai was 70%, and to buy a house of 10 million, you had to take out 7 million first, but now you only need to take out 1.5 million. - What a tempting metaphor, like the remaining 8.5 million don't pay back.
As everyone knows, the down payment ratio of 70% or 15% not only has no impact on the 10 million house payment, but the buyer also has to pay more interest. There is only one benefit of lowering the down payment ratio, that is, for residents who are eager to buy a house but can't afford to come up with a lot of cash, it can relieve the pressure of cash. From the bank's point of view, the willingness to lower the down payment ratio is because the voice has shifted to the side of the people, who tighten their pockets and no longer easily pay for a house, which is not only unbearable for developers but also for banks in the long run. Therefore, only lowering the down payment ratio is not cheap for the common people, or for the sake of developers and banks.
In the current environment, only policies that do not increase the burden on the people, including no longer allowing housing prices to rise, are good policies. (See more wonderful interpretations of "The Central Bank: Cancel the Lower Limit of the Interest Rate Policy for Commercial Personal Housing Loans for the First and Second Houses")
Yu-t'ang
Over the years, the mood of ordinary people has been like a roller coaster ride with the ups and downs of housing prices. Housing prices have indeed fallen a bit in the past year, and the market has been complaining about it. But how much has the real market fallen? Many real estate projects may not have dropped to the price of three or four years ago, and we can only blame the house price for rising to the dust, which is now difficult for everyone to adapt to for a while.
Some people say that the minimum down payment ratio of 15% indicates that the country's calculation is that housing prices will definitely not continue to fall below this ratio, and some people say that the era of buying a house is more cost-effective than renting is coming, because the monthly payment can fully cover the rent in the future, and some people say that this is the last chance to get rid of the set, and so on. But when you think about the demographic changes in the future, it will be difficult to release the demand of other cities except for those cities that still have economic development potential.
When the real estate market can develop steadily, people no longer need to be afraid and opportunistic, and when will they be able to work and live with peace of mind and contribute to economic growth. (Fortune Chinese Network) (See more "On the first weekend after the "517" property market new policy, the average daily transaction of second-hand houses in Beijing exceeded 1,000 sets)
Editor: Liu Lanxiang
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