Report: Last year, 70% of housing prices in 100 cities were in a weak state, which met the requirements of lowering mortgage interest rates

On January 7, 2023, in Changzhou, Jiangsu Province, a citizen looked out near the real estate project of Lakeview House commercial and residential buildings. People’s Vision Data Map

On January 31, Shanghai E-House Real Estate Research Institute released the “Report on Housing Prices in China’s Hundred Cities in 2022”. The report stated that the property market in 2022 will be the coldest year in the three years of the epidemic. Looking specifically at the housing price trend in 2022, it presents a V-shaped trend, indicating that in the first half of 2022, when housing prices continue to weaken, a series of new housing purchase policies and financial policies continue to work hard to prevent the risk of housing price stalls.

E-House Real Estate Research Institute found from the statistics of the year-on-year increase in the average transaction price of new commercial housing in 100 cities that among the 100 cities in the country, 70 cities had a year-on-year increase of house prices ≤ 5%, which also means that 70% of the 100 cities Home prices are weak. Such cities are the cities with the greatest probability of lowering mortgage interest rates in 2023, especially in the first quarter.

From the perspective of urban energy levels, housing prices in first-tier cities have maintained a positive year-on-year growth, while housing prices in second-tier cities such as Taiyuan, Shenyang, Shijiazhuang, Harbin, Kunming, Urumqi, Nanning, Wuhan, Haikou and Guiyang are generally weak. Cities that actively lowered mortgage interest rates. The general characteristics of such cities are that they belong to the capital cities of northern provinces or cities that have encountered obvious impacts on the cultural and tourism market. In the third- and fourth-tier cities, housing prices in Xianghe, Liuzhou, Dachang, Sanya, Rizhao, Chengde, Wenzhou, Zhongshan, Zhangjiakou and Ganzhou are generally weak, and it is also recommended to actively lower the mortgage interest rate. Among such cities, four cities around Beijing were shortlisted, namely Xianghe, Dachang, Chengde and Zhangjiakou, indicating that housing prices in such cities are generally relatively weak.

The E-House Real Estate Research Institute stated in the report that based on the statistics of housing price data in 100 cities across the country in 2022, it can be seen that housing prices in 70% of the cities are in a weak state, which generally meets the requirements of lowering mortgage interest rates or breaking through the lower limit of mortgage interest rates. It should be noted that all localities should comprehensively consider various factors, including actual housing price trends, financial credit resources, overall real estate work ideas in 2023, actual real estate market transaction status, real estate market prices since the Spring Festival this year, and existing mortgage interest rate adjustment work arrangements. and so on, according to the city’s policies to implement the adjustment of housing loan interest rates.

Observing the situation in various cities at the end of January, it can be seen that some cities have actually made active adjustments, including a direct drop of 50 basis points in Zhengzhou, and the lowest mortgage interest rate is 3.8%; Tianjin 3.9%, Xiamen 3.8%, Zhuhai 3.7% interest rate also started appearing. This shows that the ideas of various cities are highly consistent, that is, they will actively lower the mortgage interest rate in the first quarter or even before February. These cities are all second-tier cities or key cities, and their interest rate adjustment policies will be very instructive to other cities in the province.

According to the report, based on the mainstream interest rate of mortgages in the three years of the epidemic, a simple calculation of the policy effect of reducing mortgage interest rates is made. At the beginning of 2020, the mainstream mortgage interest rate in key cities across the country was 5.3%. After three years of financial policy adjustments, the consensus on “3.8% interest rate as the mainstream interest rate” gradually strengthened in January 2023. Calculating the case of “a loan principal of 1 million yuan, a loan period of 30 years, and equal principal and interest”, it is found that the monthly payment at the beginning of 2020 is 5,553 yuan, while at the current loan interest rate of 3.8%, it is 4,660 yuan. Calculated in this way, the monthly payment of a million-dollar mortgage has been reduced by 893 yuan, or a reduction of 16%. It should be noted that the mortgage interest rates implemented in different cities are different, and the frequency and timing of policy adjustments are also different.