Recently, the Central Bank announced that Set up 300 billion yuan of affordable housing refinancing, Support local state-owned enterprises to purchase commercial houses that have been built but not sold at a reasonable price and use them as affordable houses for allotment or rent.
I believe everyone knows the news.
But what many people do not know is that this is a direct "printing money" for the real estate industry, which is extremely rare in history!
Many people have no idea what "refinancing" is.
It is one of the channels for the central bank to put in base money, and in the words of ordinary people, it is a way of "printing money".
The so-called "base currency", also known as monetary base, strong currency and initial currency, is the source of multiple expansion of deposits in the entire commercial banking system.
The broad money M2 we often refer to is derived from "base money × money multiplier".
For example, the current base currency of RMB is 36.28 trillion yuan, which has been continuously derived through the way of "deposit in the bank - issue loans - deposit in the bank - re issue loans", and has become a broad money M2 of 301 trillion yuan. The current currency multiplier of RMB is 8.3 times.
The current base currency of RMB is 36.28 trillion yuan, of which 22.2 trillion yuan is foreign exchange funds, that is, the trade surplus is generated, and there are corresponding dollars (or euros, etc.). The other 14 trillion yuan was issued through refinancing, medium-term lending facilities, and supplementary mortgage loans.
"Re lending" is a loan from the central bank to financial institutions. It is not only a channel for the central bank to put base money, but also a tool to protect the national strategic intention and guide the interest rate level.
In the past few years, the Central Bank has successively granted loans for agriculture, small businesses, scientific and technological innovation, inclusive pension and equipment renovation.
Take the official announcement of "affordable housing refinancing" as an example, the reason why it was established is that the current stock of new commercial housing is too large, resulting in a large amount of capital precipitation and triangular debt, affecting economic operation.
The newly established 300 billion "affordable housing refinancing", with an annual interest rate of 1.75%, a term of one year, can be extended for four times, and is issued to 21 national banks, including the National Development Bank, policy banks, state-owned commercial banks, postal savings banks, joint-stock commercial banks, etc. The bank shall grant loans according to the principle of independent decision-making and risk bearing. The People's Bank of China will issue re loans at 60% of the loan principal, which can drive bank loans of 500 billion yuan.
Its operation mode is as follows: if the above-mentioned 21 national banks have issued loans to local state-owned enterprises for the collection and storage of stock commercial residential buildings and used as affordable housing, they can apply to the central bank for "affordable housing refinancing" at a ratio of 1:0.6.
For example, if a bank (in the list of 21 banks mentioned above) has issued a total of 10 billion eligible loans, it can apply to the central bank for a 6 billion refinancing.
Assuming that the annual interest rate of the "security housing purchase and storage loan" granted by the bank is 3.15% (30 basis points lower according to the 1-year LPR rate), and the annual interest rate of the central bank's refinancing obtained by the bank is only 1.75%, the interest margin is a subsidy to the bank.
The total amount of "affordable housing refinancing" launched by the Central Bank is 300 billion yuan, which is not the original funds in the market, but created out of thin air, so it is the basic currency.
According to the current 8.3 money multiplier, it is theoretically possible to derive a 2.49 trillion broad money M2.
Because this money is very accurate, the effect will be very obvious. It has leveraged an incremental loan of 500 billion yuan, plus the principal collected and stored by state-owned enterprises, which can probably provide 600 billion yuan of blood to the real estate industry.
It is estimated that the collection and storage activities are mainly carried out in megacities, megacities, and provincial capital cities. Assuming that the average house price in these cities is 15000 yuan/square meter, 10000 yuan/square meter after discount, each house has an average area of 80 square meters, and 600 billion yuan can collect and store 750000 sets.
Developers can guarantee the delivery of houses, pay salaries to employees, and collect payments from upstream and downstream enterprises related to building materials, home decoration, etc., so as to drive the recovery of many industries and fields.
From the perspective of the "origin" of the central bank's issuance of base currency, This is the second time in history to directly print money for the real estate industry.
Since the reform and opening up, the early and largest printing of banknotes is "foreign exchange reserve", which is used to purchase foreign currencies brought by trade surplus, and can be seen as printing banknotes for foreign trade industry and manufacturing industry; Later, the reduction of reserve ratio and medium-term lending facilities were aimed at printing money for the whole society.
It was the first time in history to print money for real estate, which was the monetary shed reform from 2016 to 2017 The way is to supplement mortgage loan (PSL). Through this channel, the newly issued base currency is given to several policy banks at ultra-low interest rates, and then distributed to local governments to implement the monetary shed reform, which has led to a round of spectacular real estate bull market.
The following is a retrospective report on that round of PSL by the 21st Century Business Herald:
In the last two years, there have been new attempts to reform the currency shed and the room ticket shed, but the PSL balance has not increased significantly. In other words, the central bank did not print money for real estate in large quantities through this channel.
The latest choice is "affordable housing refinancing".
Compared with the monetary shed reform, the purchase and storage of stock housing as affordable housing is a relatively mild stimulus, because it does not involve the reduction of stock housing.
The currency shed reform (or the house ticket shed reform) has directly demolished a large number of shantytowns or old houses, creating new demand while reducing the stock of houses, so it is more powerful and is called the "real estate market bomb".
In recent days, some We Media have also referred to "affordable housing refinancing" as a "property market nuclear bomb", which is obviously a bit exaggerated. It can only be regarded as a heavy weapon.
Whether it will become a "real estate bomb" in the future depends on the amount of funds. If 300 billion yuan eventually turns into 2 trillion yuan and 3 trillion yuan, it is OK to call it a nuclear bomb.
Anyway? The second round of "printing money directly to real estate" in the history of the RMB started.
It is relatively limited to use 300 billion yuan to leverage the market of 10 to 12 trillion yuan every year. However, the "runway" has been opened, which can be widened if it is not enough.
In the future, the amount of refinancing may be increased, or it may be used in combination with the PSL.
In fact, many central banks will directly share a share of the real estate when printing money, which is not embarrassing.
For example, during quantitative easing, the Federal Reserve usually uses two-thirds of its incremental funds to buy government bonds and one-third of its money to buy MBS (mortgage-backed bonds) linked to real estate.
For China, the inflection point of real estate means the inflection point of fiscal and taxation system, which needs reform and innovation.
Recently, both the Ministry of Finance and the Central Bank have made a statement that in the future, the Central Bank will regularly purchase government bonds in the secondary market. That is to say, in the future, there will be major changes in the way the central bank prints money. Previously, it was "foreign exchange reserve+reserve ratio reduction+MLF+refinancing+PSL".
The future will be "government bond purchase+MLF+refinancing+PSL".
Maybe it will be similar to the United States in the future, "buying government bonds+buying MBS". MBS is mortgage-backed bonds issued by the real estate industry.
When the Federal Reserve prints money, two-thirds of it goes to the Ministry of Finance (to buy government bonds), which is understandable; Why should one-third buy MBS?
The reason is simple. Although the United States has developed science and technology and achieved high-quality development, local finance mainly comes from real estate, The Federal Reserve uses one third of its incremental money to buy MBS and give it to real estate, which is actually indirectly printed to local governments 。 If the prosperity of real estate is ensured, the income of local governments will be stable. The largest income of local governments comes from the real estate tax.
If you understand this point, you will understand the significance of the 300 billion yuan refinancing of the People's Bank of China to help the real estate industry.
It seems that this is an extraordinary move at an extraordinary time, but in the future, it will be a general trend to give a part of the new base currency to the real estate industry.
The combination of real estate and national debt is an important supplement to the central finance as well as a support to local finance.
In addition, an important policy breakthrough in the real estate market recently is to reduce the down payment ratio of the first house to 15%, the lowest point in history.
Some people complained that: this means that the property market will fall by 15%, and buyers will lose their money.
Pessimists always understand the world from a pessimistic perspective.
My understanding is: this means that it is difficult for the house price to fall by 15% in the future!
Think about it, who will buy a house through 15% down payment in the future? In the second half of urbanization, those who have not bought their first house are basically low-income people in small and medium-sized cities and new citizens in big cities. This house is almost all of their lives, which can be called the national bottom line.
Just now, the first shot of the implementation of the "517 New Property Market Policy" in big cities was launched. Wuhan took the lead in announcing that the down payment ratio of the first house was reduced to 15%, and the interest rate of commercial housing loan was reduced to 3.25%; The down payment ratio of second set of housing was reduced to 25%, and the mortgage interest rate was reduced to 3.35%. Wuhan's policies are very powerful.
With Wuhan as a precedent, it is estimated that most second tier cities, as well as third, fourth and fifth tier cities, will implement the lower limit of the down payment ratio of the first and second homes, and achieve a targeted interest rate cut for housing loans.
The next key is how the four first tier cities implement the "517 New Deal". If we can emancipate our minds like Wuhan, it will help the property market reach the bottom as soon as possible.
