Timely adjustment and optimization of real estate policies
Core Reading
In order to adapt to the new situation of significant changes in the supply and demand relationship in China's real estate market, recently, multiple regions and departments have issued intensive documents to adjust and optimize real estate policies in a timely manner, better meet the rigid and improved housing needs of residents, and also have a favorable impact on expanding consumption, driving investment, and stabilizing economic growth.
On August 30th, Guangzhou and Shenzhen in Guangdong Province successively announced the implementation of the "house recognition but not loan recognition" policy. On September 1st, Shanghai and Beijing also announced the implementation of this policy.
On August 31st, the People's Bank of China and the State Administration for Financial Supervision jointly issued a notice, stating that the minimum down payment ratio for commercial personal housing loans for the first and second homes shall be no less than 20% and 30% respectively. At the same time, reduce the interest rate on existing first home loans.
Experts point out that in recent times, many regions and departments have issued intensive documents, timely adjusting and optimizing real estate policies, and releasing positive signals to promote the stable and healthy development of the real estate market.
Policies strike a "combination punch" to better meet the rigid and improved housing needs of residents
The policy of "recognizing a house but not a loan" clearly states that when a resident family applies for a loan to purchase commercial housing, regardless of whether they have used the loan to purchase a complete set of housing in the local area or not, banking and financial institutions will implement the housing credit policy for the first set of housing.
"For families with a need to change houses, under the policy of 'recognizing a house but not a loan', they can purchase a house with a lower down payment ratio and a more favorable loan interest rate. In addition, the personal income tax rebate period for residents to purchase a house has been extended. These policies help to reduce the cost of buying a house and release the demand for changing houses," said Pu Zhan, Deputy Director of the Policy Research Center of the Ministry of Housing and Urban Rural Development.
Jiang Nan has been working in Guangzhou for over 10 years. In 2015, as she was about to get married, she first purchased a wedding house in Foshan, Guangdong Province, and rented it out after simple decoration. She then rented a house in Guangzhou. In the past two years, as their child reached the age of going to school, Jiang Nan and his wife's desire to buy a house in Guangzhou has become increasingly strong.
"I have seen more than ten second-hand houses and I am quite satisfied with them, all of which cost over 6 million yuan. Previously, there was a loan for that house in Foshan, but now when I want to buy this house, the down payment is 40%, with a loan interest rate of 4.8%." Jiang Nan said, according to the new policy of "recognizing a house but not a loan", the down payment now only needs 30%, and if there is a 10% less down payment, it will be over 600000 yuan; Moreover, with a loan interest rate of 4.2% for the first home, the monthly payment burden can also be significantly reduced.
Ms. Huang, a resident of Shenzhen, also expressed a similar idea: "We have always wanted to change to a larger house to improve living conditions. However, if it is recognized as a second home, the down payment ratio is high and difficult to bear. After the new policy was introduced, the pressure has been much less."
The director of Beijing Lianjia Research Institute, Gao Tao, believes that "recognizing a house but not a loan" is mainly beneficial for the new residents and improvement oriented groups in Beijing. A common situation for new citizens is that they do not have a house in Beijing, but have a credit record for purchasing a house in another city. Under the original standards, a down payment of 60% or 80% is required to purchase a house in Beijing; In terms of the improvement oriented group, it is beneficial for the "sell one buy one" improvement replacement group. Due to factors such as changes in family structure, parenting, and elderly care, nearly 70% of homebuyers in the current Beijing residential market belong to the improvement oriented demand.
How has the market reacted to policies such as "recognizing houses but not loans"? Lou Chunlei, a store manager in an active area of Lianjia Chaoyang District, Beijing, told reporters that after Beijing announced its policies, we have received many inquiries from customers. In the first two months, the online consultation volume was usually over 20 on weekends, but this weekend it increased to over 60, and the regional listing volume has also become active. "Our target room types for improvement oriented clients are mostly priced between 8 million to 10 million yuan. Previously, when looking at a house, I was hesitant to pay 80% of the down payment for a second home. Now that the policy has been implemented, many clients have chosen to list their properties to qualify for the first home." said Lou Chunlei.
According to data provided by Beike Research Institute, from August 30th to 31st, the daily average transaction volume of second-hand houses in Guangzhou and Shenzhen increased by 25% and 70% respectively compared to last week, and the customer viewing volume also increased rapidly.
Not only the policy of "recognizing houses but not loans", but also adjusting and optimizing differentiated housing credit, reducing the interest rate of first-time housing loans, and other policies can better meet the demand for rigid and improved housing.
Officials from the People's Bank of China and the State Administration of Financial Supervision introduced that the focus of this differentiated housing credit policy adjustment and optimization includes two aspects: first, unifying the lower limit of the minimum down payment ratio policy for commercial personal housing loans nationwide. The minimum down payment ratio policy for commercial personal housing loans for first and second homes will no longer distinguish between cities that implement "purchase restrictions" and cities that do not. The lower limits will be no less than 20% and 30%, respectively. The second is to adjust the lower limit of the interest rate policy for the second housing to no less than the market quoted interest rate for the corresponding term loan plus 20 basis points. The lower limit of the first home interest rate policy is still no less than the corresponding period LPR minus 20 basis points. Each region can independently determine the minimum down payment ratio and lower interest rate for the first and second housing units within its jurisdiction based on the principle of implementing policies according to the city and the local real estate market situation and regulatory needs.
The overall real estate market has shifted to a buyer's market where supply exceeds demand
The real estate chain is long and involves a wide range, which can be said to lead the whole body.
Entering the second quarter of this year, due to the impact of the macro environment, the purchasing ability and willingness of residents have declined, and the recovery of housing as a major consumer has lagged behind. The growth rate of transaction volume in the real estate market has slowed down. From January to July, the sales area of commercial housing was 665.63 million square meters, a year-on-year decrease of 6.5%; The newly constructed area of housing is 56.969 million square meters, a decrease of 24.5%.
On July 24th, the Political Bureau of the Central Committee of the Communist Party of China held a meeting and pointed out the need to effectively prevent and resolve risks in key areas, adapt to the new situation of significant changes in the supply and demand relationship of China's real estate market, adjust and optimize real estate policies in a timely manner, implement policies tailored to the city, make good use of policy toolboxes, better meet the rigid and improved housing needs of residents, and promote the stable and healthy development of the real estate market.
Yu Xiaofen, Dean of the China Housing and Real Estate Research Institute at Zhejiang University of Technology, analyzed that there have been significant changes in the supply and demand relationship in the real estate market, mainly manifested in three aspects: first, a shift from a seller's market to a buyer's market. After more than 20 years of continuous large-scale development, the per capita housing construction area of urban residents in China has exceeded 41 square meters in 2022. Coupled with negative population growth and the impact of urbanization entering the middle and later stages, the overall market has entered a buyer's market where supply exceeds demand, especially in small and medium-sized cities where there is a large inventory of commercial housing and a long turnover cycle. The second is to shift from an incremental market to a stock based market. The growth rate of stock housing transactions in many cities is faster than the sales growth rate of newly-built commercial housing, and the transaction volume of second-hand housing in some cities has exceeded that of new housing. The third is a steady increase in the proportion of sales of existing houses, shifting from the focus on pre-sale sales.
"Adapting to the new situation of significant changes in the supply and demand relationship in China's real estate market, a series of policy measures have been implemented in recent times. This not only better meets the rigid and improving needs of residents, but also has significant implications for expanding consumption, driving investment, and stabilizing economic growth." Yu Xiaofen believes.
Dong Ximiao, Chief Researcher of Zhaolian, said that according to relevant calculations, the average decrease in the interest rate of the first home mortgage in stock this time is about 80 basis points. Taking a stock mortgage of 1 million yuan, with a 25 year term and a original interest rate of 5.1% as an example, assuming the mortgage interest rate drops to 4.3%, it can save borrowers repayment expenses of over 5000 yuan per year, which helps to reduce the burden of housing consumption and increase residents' consumption and investment capacity.
To promote the stable and healthy development of the real estate market, it is necessary to make efforts from multiple sources and maintain patience
The interviewed experts stated that the current timely adjustment and optimization of real estate policies have opened up a market expectation window. In the short term, both essential and improvement needs will be concentrated in the market, and there may be a significant increase in market transaction volume by the end of the year. However, overall, the supply and demand relationship in the real estate market has undergone significant changes and is greatly influenced by the macro environment. It is necessary to approach the development of the real estate market with a more rational attitude, which requires both confidence and patience.
"When the overall development of the market slows down, the positive side will be particularly noteworthy, such as some markets becoming more resilient and new business opportunities emerging." Yu Liang, Chairman of Vanke's Board of Directors, believes that the current urbanization rate in China is about 65%, and according to relevant predictions, it is expected to reach 70% by 2030, and the urban population will increase to about 980 million people. Conservatively estimated based on construction experience, the new construction area of real estate in the next 1 billion to 1.2 billion square meters is guaranteed.
According to Yu Liang's introduction, based on the experience of cities such as London and Tokyo, the population will continue to concentrate in cities that can create employment. Even after the market is fully mature, there will still be a large number of urban renewal projects in the central urban area to enhance the development vitality of traditional areas and meet the needs of work and housing balance. In addition, the construction of affordable rental housing, urban village renovation, and real estate agency construction and operation will also be important areas for future business growth.
"The current policies are already being implemented, and we believe that with the joint efforts of all parties, as the economic operation continues to improve and expectations for the future gradually stabilize, the market will return to a healthy and reasonable level." Yu Liang said.
Yu Xiaofen believes that in the medium to long term, promoting the stable and healthy development of the real estate market still needs to focus on both supply and demand. By accelerating the initiation of urban renewal and urban village renovation, the market size can be stabilized; By reducing mortgage interest rates and expanding the coverage of housing provident fund, we will focus on improving housing consumption capacity, relaxing purchase restrictions in large cities or areas where housing supply and demand have undergone significant changes, and stabilizing market demand; By comprehensively promoting the transfer of second-hand houses with collateral, reducing transaction deed taxes, and reasonably reducing real estate agency fees, we encourage the exchange of old for new and promote a virtuous cycle in the market; We will support high-quality state-owned real estate enterprises and high-quality private real estate enterprises equally, appropriately relax development conditions and requirements, and stabilize real estate enterprises.
The relevant person in charge of the Ministry of Housing and Urban Rural Development stated that the main focus will continue to be on boosting confidence, preventing risks, and promoting transformation to promote the stable and healthy development of the real estate market. We will implement policies tailored to the city and with precision, vigorously support the demand for rigid and improved housing, solidly promote the stable work of ensuring the delivery of buildings and the livelihood of the people, resolve the risk of enterprise funding chain rupture, strive to improve quality, build good houses, and rectify the order of the real estate market, so that the people can buy and rent houses with confidence.
