The property market is booming!
Today, the central bank and the China Banking and Insurance Regulatory Commission issued the “Notice on Issues Concerning Adjusting Differential Housing Credit Policies”, releasing important information: According to the current 5-year LPR of 4.6%, the minimum mortgage interest rate for the first home can be 4.4%.
In order to adhere to the positioning that houses are for living in, not for speculation, fully implement the long-term mechanism for real estate, support local governments to improve real estate policies based on local conditions, support rigid and improved housing needs, and promote the stable and healthy development of the real estate market, according to the State Council. Regarding the deployment, you are hereby notified of the matters related to the differentiated housing credit policy as follows:
1. For households who take out loans to buy ordinary self-occupied housing, the lower limit of the interest rate of commercial personal housing loans for the first set of housing is adjusted to be no lower than the market quotation interest rate of the loan of the corresponding period minus 20 basis points, and the lower limit of the policy of commercial personal housing loan interest rate for the second set of housing is based on Existing regulations apply.
2. On the basis of the unified lower limit of loan interest rates across the country, the local offices of the People’s Bank of China and the China Banking and Insurance Regulatory Commission will guide the provincial market interest rate pricing self-discipline mechanism in accordance with the principle of “implementing policies according to the city”, according to the changes in the real estate market situation in the cities within the jurisdiction and the city’s According to the government’s regulation requirements, it can independently determine the lower limit of the interest rate of commercial personal housing loans for the first set and second set of housing in each city within the jurisdiction.
This means that, based on the current 5-year LPR of 4.6%, the first mortgage interest rate can be as low as 4.4%. Yan Yuejin, research director of the Think Tank Center of the E-House Research Institute, believes that this is the first time the central bank has issued a special document on the differentiated housing loan policy, which fully reflects the determination of the current housing loan to continue to make efforts to reverse the recent decadent trend of real estate transactions.
1 million mortgage can be reduced by more than 40,000
According to the “Statistical Report on the Loan Investment of Financial Institutions in the First Quarter of 2022” released by the central bank, the current national personal mortgage loan interest rate is 5.42%. If it is calculated by subtracting 20 basis points, the actual interest rate can be 5.22%. We can measure changes in mortgage interest rates and cost changes for home buyers. Calculated based on the loan amount of 1 million, equal principal and interest, and 30-year monthly repayment:
1) In the case of 5.42%: At this time, the monthly payment is 5,627.8 yuan, and the total interest is 1,026,000 yuan.
2) 5.22% of the cases. At this time, the monthly payment is 5503.47 yuan, and the total interest is 981,200 yuan.
In this way, the monthly payment is reduced by 124.33 yuan, and the total interest is reduced by 44,800 yuan.
In layman’s terms, if the bank can indeed reduce the price by 20 basis points according to the central bank’s policy in practice, then the buyer who has borrowed 1 million can pay back more than 100 yuan per month, and in 30 years, he can pay back more than 40,000 yuan less. .
This time, the central bank has clarified an important idea, that is, the lower limit of the interest rate of the first residential commercial personal housing loan is adjusted to not be lower than the market quoted interest rate of the corresponding term loan minus 20 basis points. It can be seen from this statement that new requirements and supporting policies have been put forward for the downward trend of loan interest rates.
1. The lower limit of interest rates is allowed to be further lowered, which makes commercial banks have more room for loans and helps to better promote the reduction of real loan interest rates for housing loans in the future.
2. A statement similar to a 20 basis point reduction fully shows that the reduction is relatively large, which will also guide banks to formulate better loan policies in the future, especially to recommend some low-cost loan interest rates.
3. This type of downward adjustment mainly emphasizes the first housing. In fact, it is also hoped that the cost of purchasing a house in just need is further reduced, which is a very good policy to support the purchase of a house in just need.
The announcement of the central bank’s policy choice at the weekend also shows that the guidance of policy reduction is very urgent and necessary, which fully reflects the guidance of the financial sector on the current reduction of housing loan costs. Yan Yuejin believes that it will have four important impacts:
1. It will help guide local governments and banking institutions to further adjust their loan policies, especially in terms of mortgage interest rates, which can be reduced if they can be lowered, and fully implemented for low-cost housing purchases.
2. It will help to guide real estate enterprises to actively promote and sell, especially in combination with the recent advantages of low interest rate costs of housing loans, encourage real estate enterprises to actively sell, and fully promote the activity of real estate transactions.
3. It will help to further reduce the cost of home buyers. At the same time, combined with the recent relaxation of policies in various places, it can objectively further reduce the pressure of home buyers. Policies including lowering down payments, lowering mortgage interest rates, loosening restrictions on second-hand housing sales, and loosening purchase restrictions will create better conditions for active market transactions in mid-to-late May and subsequent markets.
4. It will help all localities to carry out real estate loan work based on actual conditions. Some cities with weak market transactions will actively carry out looser housing loan policies based on differentiated credit policy tools.
Yan Yuejin said that this policy is actually equivalent to the lowest interest rate of 4.4% in the future, which is very favorable. However, the actual operation depends on the regulations of the local banks. But there is one point, from the perspective of further relaxation of the current housing loan policy for new citizens, new citizens may be able to get these ultra-low interest rate loans in the future. This may also be a new meaning of this policy for the support of rigid needs, which reflects the state’s support and guarantee for new citizens to buy houses.
Everbright Securities believes that the new social financing in April was significantly lower than market expectations and the level of the same period in previous years, and the sharp year-on-year contraction of on-balance sheet credit was the main source of drag, especially for residential housing, consumption and business loans. Therefore, its outlook policy is expected to be accelerated across the board, and the LPR reduction in May can be expected. Monetary policy is expected to accelerate the downward guidance of LPR quotation interest rates through stock and incremental policy tools, and LPR is expected to be lowered in May. In April, the central bank has significantly reduced the debt cost of financial institutions by reducing the reserve requirement ratio, turning over the balance of profits, and establishing a market-oriented adjustment mechanism for deposit interest rates. Looking forward, the central bank is expected to continue to take multiple measures to reduce the cost of debt of financial institutions and guide the cost of social financing to continue to decline.
Policy aims to be stable, not active
Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Planning Institute, believes that the central bank’s adjustment of the differentiated housing credit policy shows that the current real estate downturn speed and magnitude have exceeded the bottom line of tolerance, which has affected stable growth.
He analyzed that under the background of high housing prices, the pressure of new citizens to buy a house is unprecedented, and the current housing price level has reached an all-time high. There is demand in the current property market, and the strongest demand is for new citizens, who are basically buying houses for the first time, but they are under great pressure, especially in the context of a significant decline in income and expectations under the epidemic, if the cost of buying a house is not reduced, it is It is impossible to fundamentally solve the weaker demand in the property market and the decline in expected pessimistic confidence. Therefore, the central bank lowered the mortgage interest rate for the first home buyers.
It should be noted that this policy has not adjusted the second housing, which shows that our policy orientation still does not want the real estate to absorb more funds from the society, and does not want the social funds to flow into the real estate too quickly. fried” principle. Our policy is to do something and not to do something, there is a bottom line, not to save the market, nor to relax the financial policy in order to stimulate the real estate. The purpose of the policy is to stabilize the real estate, not to make the real estate active again. Don’t expect the real estate to play a big role in the new round of stable growth. Our policy goal is to stabilize the property market, so that it will not be a significant drag on the economy, and will not cause systemic risks, that’s all.
Under the current high housing prices, cutting interest rates only reduces the monthly payment amount, but cannot reduce high housing prices and high costs. Li Yujia believes that to reduce costs comprehensively, it is necessary to reduce the cost of the entire chain, including land costs, taxes and fees, and The financial cost this time, only in this way can more new citizens have the ability to buy houses.
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