event
On May 17, the nationwide video conference on housing guarantee was held in Beijing on May 17. The People's Bank of China issued four new policies on housing loans, reducing the down payment ratio of housing loans, lowering the interest rate of provident fund loans, canceling the lower limit of the national commercial personal housing loan interest rate policy for the first and second housing, and setting up a 300 billion yuan security housing refinancing.
Interpretation
This real estate policy combination, with the de stocking of commercial housing as the core, works simultaneously from the supply side and the demand side to reduce the down payment ratio, lower the interest rate of provident fund, cancel the lower limit of housing loan interest rate, and set up 300 billion yuan to guarantee the re lending of housing, which reflects the transformation of the rescue policy of injecting liquidity into the real estate market and local de stocking, and will greatly improve the expectations of the real estate market, Enhance the confidence of house purchase.
1. These policies and measures are the concrete implementation of the real estate related work proposed by the 430 Central Political Conference. The meeting of the Political Bureau of the Central Committee proposed that we should continue to implement policies based on the city, strengthen the responsibilities of local governments, real estate enterprises, and financial institutions, earnestly ensure the delivery of housing, and protect the legitimate rights and interests of property buyers. In combination with the new changes in the relationship between supply and demand in the real estate market and the new expectations of the people for high-quality housing, we should make a comprehensive study of the policies and measures to digest the stock of real estate and optimize the incremental housing, pay close attention to the construction of a new model of real estate development, and promote the high-quality development of real estate.
2. The new real estate policy focuses on the de stocking of commercial housing. The nationwide video conference on housing guarantee and delivery stressed the people's and political nature of the real estate work, continued to adhere to the policy of taking measures for the city, played a key role in dealing with the risk of commercial housing uncompleted, and solidly promoted the key work of housing guarantee and delivery, digesting the stock of commercial housing. First, focus on promoting the disposal of commercial housing projects under construction that are difficult to sell and deliver, fully support the financing and completion delivery of projects that should be continued, and protect the legitimate rights and interests of buyers. Second, the relevant local government should proceed from the actual situation and properly dispose of the idle stock residential land that has been transferred by means of recovery, acquisition, etc., as appropriate, in order to help real estate enterprises with financial difficulties.
In cities with a large inventory of commercial housing, the government can purchase some commercial housing at a reasonable price to be used as affordable housing. Revitalizing inventory is the key to solving the current difficulties in the real estate market.
3. The central bank will set up 300 billion yuan of affordable housing loans, encourage and guide financial institutions to follow the principles of marketization and rule of law, and support local state-owned enterprises to purchase unsold commercial housing at a reasonable price, which will be used as allotment or rent affordable housing, and as allotment or rent affordable housing, which is expected to drive bank loans of 500 billion yuan. This will support the price of new commercial housing in stock and promote the dissolution of the stock of commercial housing.
4. The real estate rescue efforts are relatively strong. The minimum down payment ratio of housing loans dropped to a historical low. For households purchasing commercial housing with loans, the minimum down payment ratio of commercial individual housing loans for the first housing is adjusted to not less than 15%, and the minimum down payment ratio of commercial individual housing loans for the second housing is adjusted to not less than 25%.
Previously, the national down payment ratio for house purchase was at the lowest level of 20%, and the adjusted down payment ratio for house loan was at a new historical low, which is not only the most relaxed policy in the history of mortgage loan, but also the most relaxed policy among various house purchase policies in recent years, indicating that great importance is attached to destocking and supporting reasonable housing consumption demand, It is of great significance for the rapid release and large-scale release of just needed and improved housing.
The interest rate of provident fund loans was cut by 0.25 percentage points. From May 18, 2024, the loan interest rate of personal housing provident fund will be lowered by 0.25 percentage points. The loan interest rate of the first personal housing provident fund for less than five years (including five years) and more than five years will be adjusted to 2.35% and 2.85% respectively, and the loan interest rate of the second personal housing provident fund for less than five years (including five years) and more than five years will be adjusted to not less than 2.775% and 3.325% respectively.
The lower limit of the national housing loan interest rate policy was abolished. Each provincial branch of the People's Bank of China, in accordance with the principle of implementing policies based on the city, guides the self-discipline mechanism of interest rate pricing in each provincial market, and determines whether to set the lower limit and the lower limit level (if any) of the commercial personal housing loan interest rate in each city under its jurisdiction according to the real estate market situation in each city under its jurisdiction and the regulatory requirements of the local government.
At present, some banks in some cities have implemented the first set of housing loan interest rate at about 3.1%. This time, the central bank has cancelled the national floor of housing loan interest rate, and the favorable policy has been extended to second homes. It is expected that more cities will reduce the housing loan interest rate, and the space for the first and core second tier cities to reduce the housing loan interest rate is also expected to open.
Previously, the lower limit of the loan interest rate for the first and second homes was LPR-20BP for more than five years and LPR+20BP for more than five years, respectively. The lower limit of the loan interest rate for the first home could be phased out in cities where the price of new homes fell for three consecutive months on a year-on-year basis. According to the data released by the Central Bank, as of the end of March, 75 of the 343 cities (prefecture level and above) had lowered the lower limit of the first housing loan interest rate, and 64 had canceled the lower limit.
5. It has a great impact on the macro-economy. When the house price has dropped significantly, the loan interest rate will be lowered, especially after the lower limit of interest rate is not restricted, the monthly payment will be greatly reduced. This has a great incentive effect on the sales of new houses, which is of great significance in promoting the circulation of new houses and second-hand houses, reducing inventory and listing, activating trading sentiment, and stabilizing the price system.
After the implementation of this round of rescue policies and measures, the sales of commercial housing will be strongly stimulated. The decline of new real estate construction, commercial housing sales and real estate development investment is expected to narrow, and the drag of the real estate industry on the macro-economy is expected to decline.
In the first quarter, the added value of the real estate industry dropped 5.4% year on year, and the decline was larger than that in the fourth quarter of last year and the whole year of last year.
From January to April, the investment in real estate development dropped 9.8% year on year, 0.3 percentage points more than that in March. The sales area of new commercial housing was 292.52 million square meters, down 20.2% year on year, of which the sales area of residential housing was down 23.8%. The sales volume of newly built commercial housing was 2806.7 billion yuan, down 28.3%, of which the sales volume of residential housing dropped 31.1%. The newly started housing area was 235.1 million square meters, down 24.6%, of which the newly started housing area was 1700.6 million square meters, down 25.6%. The real estate industry has a great drag on the macro-economy. Excluding the drag of the real estate industry, the GDP growth rate will significantly increase.
6. This round of real estate market policy combination will greatly improve the expectation of the real estate market, enhance the confidence of buying houses, and the sales of commercial houses will become more active, which will help the overall recovery of the real estate market.
Investment advice
It is directly beneficial to the real estate industry and the upstream and downstream industrial chains of real estate, and is conducive to consolidating the economic recovery trend.
Risk warning
1. The development of the epidemic exceeded expectations;
2. Geopolitical deterioration exceeded expectations;
3. The recession in the US and Europe exceeded expectations.
