Recently, there have been frequent voices from relevant departments in China regarding real estate policies, and these policies have continued to be optimized and adjusted. These new policies include extending the implementation period of the Guaranteed Housing Loan Support Plan, guiding banks to adjust the interest rate of existing personal housing loans, and further implementing the concept of “recognizing housing without subscribing to loans”. What signals do these new policies send and what impact will they bring?
The optimization of real estate policies aims to support the demand for rigid and improved housing. This can be seen in the many preferential policies that homebuyers like Mr. Zhao in Nanjing have enjoyed, such as lower down payment ratios, lower interest rates, increased loan amounts, and tax refunds. Localities across China have been continuously optimizing their real estate control policies by lowering down payment requirements, issuing house purchase subsidies, strengthening provident fund policies, and providing tax subsidies for improved housing purchases. As a result, personal housing loans have increased by more than 510 billion yuan compared to the same period last year, and the personal housing loan interest rate in June decreased by 0.51 percentage points year-on-year. These policies are aimed at shifting the real estate market from high-speed development to steady development.
The Political Bureau of the Central Committee of the Communist Party of China has proposed adapting to the new situation of major changes in the supply and demand relationship of the real estate market. This includes timely adjusting and optimizing real estate policies and making use of city-specific policies. The Ministry of Housing and Urban-Rural Development has expressed its intention to further implement policies and measures such as “recognizing a house but not a loan” for personal housing loans, while the National Development and Reform Commission aims to strengthen policy reserves to better meet residents’ housing needs. Zou Lan, director of the Monetary Policy Department of the People’s Bank of China, stated that the supply and demand relationship in the real estate market has undergone profound changes, and there is room for optimization of the policies that were introduced during the market’s overheating stage. The central bank will continue to guide the decline in personal housing loan interest rates and down payment ratios to meet residents’ housing needs.
These policy adjustments have received positive responses from localities and institutions. First-tier cities such as Beijing, Shenzhen, Guangzhou, and Shanghai have expressed their support for residents’ rigid and improved housing needs. Other cities, such as Zhengzhou, Wuzhou, Zhenjiang, Yangzhou, and Suzhou, have also introduced various preferential policies to promote the real estate market. Homebuyers have shown increased interest, particularly in policies that reduce down payment ratios and interest rates.
The policy of “recognizing a house without subscribing to a loan” is expected to activate the house replacement chain and boost market transactions. Reducing the interest rate of existing mortgages will help reduce prepayment and illegal lending behaviors, and boost residents’ willingness and ability to expand consumption. The central bank’s change from “support and encouragement” to “guidance” regarding the adjustment of stock mortgage interest rates sends a positive signal and will help accelerate the implementation of policies.
Moreover, meeting the reasonable financing needs of real estate enterprises is crucial for stabilizing and recovering the real estate market. The “Sixteen Financial Measures” policy, which was implemented at the end of last year, has provided support and special loan support to real estate companies. These measures have helped in the resumption of projects and ensured progress in delivery. The financial management department has extended the applicable period of these policies and the implementation period of the loan support plan for guaranteed delivery buildings to provide continuous financial support to real estate companies.
In conclusion, the recent real estate policies in China aim to support the demand for rigid and improved housing, adapt to the changing supply and demand relationship in the real estate market, and meet the financing needs of real estate enterprises. These policies send positive signals and are expected to have a significant impact on the real estate market.