What impact will it bring to the market and residents?, Shanghai implements a new policy of "recognizing houses but not loans"

Today, the policy of "recognizing a house but not a loan" for Shanghai's first home loan was officially released. The new policy clarifies that starting from September 2nd, when Shanghai residents apply for loans to purchase commercial housing, if their family members do not have a complete set of housing under the name of Shanghai, regardless of whether they have used the loan to purchase housing, banking and financial institutions will implement housing credit policies for the first set of housing.

Will the market and residents be affected by the transition from "housing and loan recognition" to "housing and loan recognition but not loan recognition"?

New policies have been implemented in all first tier cities

"Housing and loan recognition" refers to the process in which relevant institutions review the registration information and loan records of the borrower's household when applying for a housing loan, and determine whether the purchased property belongs to the first or second home. If there is registration information in the local housing registration system or a loan purchase record in the credit reporting system, when purchasing a commercial housing again, the house will be recognized as a second home or above.

"Accepting a house but not a loan" can be simply understood as meaning that as long as the buyer does not own a house under the local name, regardless of whether they have had a mortgage before, they can enjoy the down payment ratio and interest rate discount for their first home loan. This is a new policy tool for regulating the real estate market in China.

On August 25th, the Ministry of Housing and Urban Rural Development, the People's Bank of China, and the State Administration of Financial Supervision jointly issued a notice on optimizing the criteria for determining the number of housing units in personal housing loans, promoting the implementation of the policy measures of "not recognizing loans but recognizing houses" for the purchase of first home loans.

The Notice clearly states that when a resident family applies for a loan to purchase commercial housing, if their family members do not have a complete set of housing under the local name, regardless of whether they have used the loan to purchase housing, banking and financial institutions will implement the housing credit policy for the first set of housing. This policy, as a policy tool, is included in the "One City, One Policy" toolbox for cities to choose independently.

As a national benchmark for the real estate market, the trend of first tier cities has attracted market attention. On August 30th, Guangzhou and Shenzhen actively followed up and responded, announcing the implementation of the "house recognition but not loan recognition" policy; On September 1st, Shanghai and Beijing also successively announced the implementation of this policy. At this point, all first tier cities have implemented the policy of "recognizing houses but not loans".

Reducing the cost of purchasing a house from two aspects

According to the Ministry of Housing and Urban Rural Development, the new policy is aimed at enabling more homebuyers to enjoy the down payment ratio and interest rate discounts for their first home loans, which will help reduce the cost of purchasing a house for residents and better meet the demand for rigid and improved housing.

How much specific discount can Shanghai citizens offer? Yan Yuejin, the research director of E-House Research Institute, calculated an account for reporters: "The average total price of new houses in Shanghai is about 5 million yuan. Taking this as an example, before the implementation of the new policy, if a new house purchased by citizens was recognized as a second home, the minimum down payment ratio was 70%, and the down payment required was 3.5 million yuan. After the implementation of the new policy, this new house was included in the category of first home recognition, with a minimum down payment ratio of 35%, and the down payment required was 1.75 million yuan. That is to say, the down payment cost was half less than before."

Buying a house changes from a second home to a first home, and the mortgage interest rate will also decrease accordingly. "At present, the interest rate for commercial loans for second homes in Shanghai is 5.25%. If the loan principal is 2 million yuan, calculated based on a 30-year equal amount of principal and interest, the total interest expenditure is about 1.98 million yuan, and the monthly payment is about 11044 yuan/month." Yan Yuejin said. But after the implementation of the new policy, the interest rate standard for the first home will be applied, with an interest rate of 4.55%. The total interest expenditure is about 1.67 million yuan, and the monthly payment is about 10193 yuan. By comparison, total interest expenses decreased by nearly 310000 yuan and monthly payments decreased by approximately 851 yuan.

Support the release of reasonable housing consumption demand

"The new policy of 'recognizing houses but not loans' is a further release of reasonable support for various housing consumption needs under the premise of adhering to the principle of' housing is for living, not for speculation '. Chen Jie, director of the Housing and Urban Rural Development Research Center at Shanghai Jiao Tong University, believes that improving families are the most direct beneficiaries.".

There is strong demand for improved housing in Shanghai. In the past, when homebuyers changed houses in Shanghai and had a loan record under their name, they were recognized as having a second home. The corresponding down payment and credit requirements were higher, which constrained the release of some demand for improvement.

The introduction of talents will also benefit from this new policy. In the past, some introduced talents who had a house or loan record in another city and purchased a house in Shanghai would be considered as a second home, which was not conducive to the stable housing of talents.

Shanghai is building five new cities and promoting various emerging industries. As the cornerstone of urban development, talent competition is increasingly intensifying. Experts believe that implementing the policy of "recognizing houses but not loans" is conducive to boosting the confidence of talents to settle in Shanghai and accelerating the inflow of talents to a certain extent.

Market transactions are expected to remain active

Experts interviewed generally stated that the new policy will objectively guide market expectations towards positive development and have a positive and significant effect on boosting market trading volume.

Lu Wenxi, Chief Analyst of Shanghai Zhongyuan Real Estate, told reporters that although the Shanghai real estate market has maintained overall healthy and stable development, the housing transaction data in July and August is slightly flat. Among them, the monthly transaction volume of new houses is over 500000 square meters, which is lower than the normal value; The willingness to trade second-hand houses is also not strong, with monthly transaction volumes in July and August both below the normal level of 15000 units, indicating a slight lack of market vitality.

"There is a saying in the real estate market that 'nine gold and ten silver', and September and October are generally regarded as important window periods for the development of the real estate market in the second half of the year. The introduction of new policies is timely and will release very positive signals," said Lu Wenxi.

Recently, the list of the 8th batch of concentrated new houses to be listed in Shanghai this year was announced, and related properties will gradually enter the market, including 7 improved projects with a unit price exceeding 100000 yuan/square meter. Yan Yuejin predicts that Shanghai's real estate market transactions are expected to remain active in September, with important performance in areas such as primary and secondary housing. Shanghai real estate companies have shown a significant increase in enthusiasm in promoting their properties, while homebuyers have shown a clear willingness to enter the market and their purchasing strategies have become more clear after the policy is clarified. Related banks, intermediary agencies, and other businesses will also perform well in terms of business volume.

Experts remind all market participants, including real estate companies, intermediaries, marketing agencies, landlords, etc., to cherish the policy of recognizing houses but not loans. They should not only make full use of this policy, but also maintain a good order in the real estate market and promote the stable and healthy development of the Shanghai real estate market.