Source title: Some cities adjust the first-home loan interest rate to release reasonable demand in the real estate market
Some cities adjust the first home loan interest rate——
Release the reasonable demand of the real estate market
For a period of time, both supply and demand sides of the real estate market have gradually recovered, and the capital price of individual housing loans has further dropped. Under the guidance of the dynamic adjustment mechanism of the first-home loan interest rate policy, the first-home loan interest rate in some cities has dropped below 4%, and the cost of home purchase has continued to decline.
From the perspective of the supply side, the liquidity of real estate companies has been eased in an orderly manner, and the financing environment for high-quality real estate companies has improved significantly. The special loan funds for Baojiao Building have basically been allocated to the project, effectively promoting construction delivery, and the reasonable demand in the real estate market is expected to be further released.
Dynamically adjust interest rates in multiple places
Recently, the first-home loan interest rates in many places have further dropped, and some have dropped to 3.8% and 3.7%. According to data from the Shell Research Institute, as of January 31, among the 103 cities monitored, there were 30 cities where the first-home loan interest rate was lower than 4.1%, including 8 second-tier cities, and the rest were third- and fourth-tier cities.
The decline in the first-home interest rate in these cities is closely related to the dynamic adjustment mechanism of the first-home loan interest rate policy. A few days ago, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a notice deciding to establish the first set of dynamic adjustment mechanism for housing loan interest rate policy. If the sales price of newly-built commercial housing in a certain city has decreased month-on-month and year-on-year for three consecutive months, the city may maintain, lower or cancel the lower limit of the local first-home interest rate policy in stages.
This policy is a continuation of relevant policies in the fourth quarter of last year. In September last year, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a notice that eligible cities can independently decide to gradually relax the lower limit of interest rates for new first-home loans in the fourth quarter. “After the policy was introduced, some urban governments actively made corresponding adjustments, which led to a reduction in the interest rate of new mortgages.” Zou Lan, director of the Monetary Policy Department of the Central Bank, said that the data shows that the national average interest rate of newly issued personal housing loans in December 2022 is 4.26%, a decrease of 1.37 percentage points from December 2021, and has reached the lowest level since statistics began in 2008.
“This adjustment is mainly based on the good results achieved by the previous policies, in accordance with the principle of city-specific policies, and according to the development status of the real estate market in each city, dynamically adjust the ‘permission to gradually relax the lower limit of the first-home loan interest rate city scope’ , and then form a long-term mechanism to support the stable and healthy development of the real estate market.” Zou Lan said.
Regarding whether the drop in mortgage interest rates will lead to the influx of hot money into the property market, the financial management department made it clear that the new policy is both stable and flexible. “House prices have obvious cyclical fluctuations, rising for 3 consecutive months or falling for 3 consecutive months, indicating that house prices have undergone trend changes, but the trend changes often take a long time.” Zou Lan said that according to the new policy, Although the relevant departments have to evaluate the changes in housing prices every quarter, if the lower limit of mortgage interest rates is to be adjusted, the cycle may far exceed the evaluation cycle.
Improve demand-side expectations
Improving social expectations and releasing reasonable demand is an important task for the real estate market this year. The Central Economic Work Conference clearly stated that it is necessary to implement policies according to the city, support rigid and improved housing needs, solve the housing problems of new citizens and young people, and explore the construction of the long-term rental housing market; we must insist that houses are for living, not for speculation Positioning to promote the smooth transition of the real estate industry to a new development model.
Currently, sales in the real estate market are still under pressure. According to the latest data from the National Bureau of Statistics, the sales area of commercial housing in 2022 will be 1,358.37 million square meters, a decrease of 24.3% from the previous year, of which the sales area of residential buildings will decrease by 26.8%. Sales fell 28.3%.
“There are many reasons for the decline in demand, and unstable expectations are one of the important reasons.” Zeng Gang, director of the Shanghai Finance and Development Laboratory, said that on the one hand, due to the impact of the epidemic, some residents’ income expectations have changed, which has led to their house-buying behavior. Cautious; on the other hand, individual real estate companies had liquidity difficulties and financing obstacles before, which even led to the failure to deliver houses under construction on time, which further affected the confidence and expectations of residents in buying houses.
The decline in first-home loan interest rates in many places will help to further release reasonable demand, expand effective demand, and support rigid and improved housing demand. “In areas such as housing consumption, there are still some restrictive policies that hinder the release of consumer demand, and these consumption potentials must be released.” The responsible comrades of the Central Finance Office said that they should increase consumer credit reasonably and support consumption such as housing improvement; at the same time, combined with the implementation of The childbirth policy and talent policy have been adopted to solve the housing problems of old and new citizens and young people.
Kang Yi, director of the National Bureau of Statistics, said that my country is still in the stage of sustainable urbanization. Last year, the urbanization rate of permanent residents increased by 0.5 percentage points compared with the previous year, reaching 65.22%. high. Last year, my country’s new urban population was huge, and these are the future development space. Next, the reasonable demand in the real estate market will be gradually released.
Do a good job in supply side protection
Since the demand side and the supply side of real estate interact and strengthen each other, we must continue to do a good job in ensuring the supply side. The Central Economic Work Conference clearly stated that we should solidly do a good job in ensuring the delivery of buildings, people’s livelihood, and stability, meet the reasonable financing needs of the real estate industry, promote industry restructuring and mergers, effectively prevent and resolve the risks of high-quality leading real estate companies, and improve the assets and liabilities. At the same time, we must resolutely crack down on illegal and criminal activities in accordance with the law.
“The problem on the supply side is mainly manifested in the tight liquidity of real estate companies.” Zeng Gang said that this will have two impacts. On the one hand, it increases the credit risk of real estate companies, which further hinders their financing. Financing difficulties accelerate the risk exposure of real estate companies; on the other hand, financial difficulties will cause real estate companies to fail to deliver some houses under construction on time, which will affect the demand of home buyers. It is expected that this will affect the sales and payment of real estate companies, and further aggravate the liquidity tension of real estate companies.
In order to solve the above problems, the financial management department strives to alleviate the liquidity tension of real estate companies and stabilize the reasonable financing of real estate companies. Previously, credit, bonds, and equity financing have been “triangled”, and the financing environment for real estate companies, especially high-quality real estate companies, has improved significantly. Data show that from September to November 2022, real estate development loans have increased by more than 170 billion yuan, an increase of more than 200 billion yuan year-on-year; in the fourth quarter of 2022, domestic real estate corporate bonds issued more than 120 billion yuan, a year-on-year increase of 22%.
In the next step, the financial management department will implement comprehensive measures to improve the operating and financing cash flow of high-quality real estate companies. Prior to this, the People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly held a symposium on major bank credit work to study and solve the problem of improving the asset and liability status of real estate companies. The four actions of asset activation, liability continuation, equity supplementation, and expectation improvement will guide the balance sheets of high-quality real estate companies to return to a safe range.
At the same time, various tasks such as ensuring the delivery of buildings, ensuring people’s livelihood, and ensuring stability will also be solidly advanced to further stabilize the expectations and needs of home buyers. The People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly held a major bank credit work symposium, emphasizing that it is necessary to make good use of policy tools such as special loans for guaranteed delivery buildings and loan support programs for guaranteed delivery buildings, actively provide supporting financing support, and protect the legitimate rights and interests of housing consumers. “The investment of special loan funds for Baojiao Building led to the formation of a batch of physical workloads, which effectively promoted the construction and delivery of the project.” The relevant person in charge of the China Banking and Insurance Regulatory Commission said.