Interest rates cut to welcome spring in 2024, Qingdao’s property market is waiting to sprout
On February 20, the central bank adjusted the latest LPR interest rate, adjusting the 5-year LPR from 4.2% to 3.95%. So far, the interest rate for the first commercial residential loan in Qingdao can be as low as 3.75%, and the second loan interest rate can be as low as 4.15%. First home loan interest rates have returned to below 4%, hitting record lows.
Taking a 1 million yuan 30-year commercial loan with equal principal and interest as an example, after the first home loan interest rate is reduced from 4% to 3.75%, the monthly repayment amount will be reduced from 4774.15 yuan to 4631.16 yuan, which can save 142.99 yuan per month, and the total amount will be 30 years. You can save about 51,500 yuan in interest. Different from the 10BP fine-tuning in the past, this time the rate cut is as high as 25BP, which is the largest in history!
The rise of second-hand housing in Qingdao in 2023
According to data from Ruili, Qingdao’s new residential transactions will be approximately 85,660 units in 2023, a year-on-year decrease of 26.87%; at the same time, second-hand residential transactions will be approximately 62,361 units, a year-on-year increase of 62.37%, reaching the highest level in the past five years. Since the property market exploded in 2022, new homes have entered a downturn, while second-hand homes have experienced low prices and rising volumes. New homes have slightly declined year-on-year, while second-hand homes have surged year-on-year. The overall transaction volume of Qingdao’s property market still shows a stable trend.
In comparison, although the transaction volume of new homes fell slightly year-on-year, the decline was limited. The response from real estate companies has improved significantly compared with last year. On the one hand, the delivery capacity of Qingdao’s property market in 2023 will be significantly improved compared to 2022. According to incomplete statistics from Fangtianxia, nearly 160 new housing projects in the Qingdao property market will be delivered in 2023, and some previously delayed projects such as Sunac, Evergrande, Zhongnan, Shimao, Blu-ray, and Xuhui are also being delivered.
On the other hand, more and more companies such as Hisense, Longfor, Jinmao, Junyi Holdings, China Resources, North Shore Real Estate, Yuexiu, etc. are testing quality and delivering products ahead of schedule. Delivering ahead of schedule has become the mission of many brand real estate companies in 2023. Taking Hisense Real Estate as an example, in 2023, the advance delivery rate will be 86%, the on-schedule delivery rate will be 100%, and the average one-time delivery rate will be 99.9%. Under the current market environment, it demonstrates the steady delivery strength of branded real estate companies. The market has undergone profound adjustments, small real estate companies have withdrawn, and branded real estate companies have become more intensive and responsible. The quality and delivery of volumes have helped the development of property market products to be better and further.
Third, not only will the year-on-year transaction volume of second-hand housing in 2023 increase by more than 60%, but the number of second-hand housing intermediaries will also increase significantly during the Spring Festival in 2024. The number of inquiries from netizens in Fangtianxia’s home buying group has also increased significantly compared with a year ago. According to Fangtianxia’s backend monitoring, during the 2024 Spring Festival holiday, user activity increased by 198% month-on-month, online views increased by 178% month-on-month, and new home consultation leads increased by 145% month-on-month. Homebuyers are already eager to welcome the start of spring.
Qingdao property market pressure and opportunity coexist
By 2024, the real estate industry has been in a downturn for two or three years, and the real estate market pressures and opportunities coexist. According to data from China Index Research Institute, as of January this year, Qingdao’s remaining salable inventory of new homes was approximately 144,540 units, a month-on-month decrease of 23,749 units. The salable area was approximately 17.6444 million square meters, a month-on-month decrease of 2.3229 million square meters, and the sales cycle was approximately 25.49 times. moon. Inventory is still high, but the absolute value has decreased month-on-month. At the same time, the depuration cycle in main urban areas such as Licang, Laoshan, and High-tech Zone is relatively low, and demand in popular locations remains dynamic.
In 2024, the banking industry’s support for the real estate industry will further accelerate. According to the latest disclosure by the five major state-owned banks, namely Industry, Agriculture, China, China Construction and Communications, they have handled more than 8,000 real estate financing “whitelist” projects. In addition to major state-owned banks, joint-stock banks such as Industrial Bank, China Everbright Bank, and China Merchants Bank also announced the latest status of their follow-up to “white list” projects during the Spring Festival.
According to the relevant person in charge of the Qingdao Municipal Housing and Urban-Rural Development Bureau: “228 real estate companies have proposed financing needs of 40.13 billion yuan. The first batch of 84 projects have been pushed to the city’s financial institutions, with financing needs of 25.02 billion yuan. After the list is pushed, The policy has been implemented quickly, and a total of 13 projects have been approved for credit of 4.29 billion yuan.” At the same time, Qingdao City has started the second batch of “white list” applications based on the principle of “equal treatment.”
Promote the stable development of the property market
In terms of pre-sale fund supervision and delivery, Qingdao has implemented new pre-sale fund supervision measures for commercial housing since January 1. Strict supervision will be given, and priority will be given to the construction of pre-sale projects. The government will regularly publish regulatory fund account numbers to provide buyers with peace of mind. The Qingdao Housing Provident Fund Center recently launched a smart real estate management platform, which uses PTZ cameras and other hardware screen transmission to display real-time panoramic views of the real estate construction site, enabling dynamic supervision of real estate projects signed by real estate companies.
At the beginning of the Year of the Dragon, the central bank directly lowered the 5-year LPR mortgage interest rate to 3.95% on the basis of the previous reduction of the deposit reserve ratio by 0.5 percentage points on February 5, aiming to alleviate the medium and long-term mortgage pressure of home buyers. In 2024, we will see that not only the stock market consolidation will usher in in-depth reforms, but the financial industry’s support for the real estate industry will also go into deep water. Supervision will be stricter, support will be more detailed, and progress will be made in a targeted and step-by-step manner.
Guanhai News/Qingdao Evening News/Pocket Qingdao Reporter Zhang Zhengyan Correspondent Siyu