Why is Guangzhou leading a first tier city?, The lower limit of the first home commercial loan interest rate has exceeded LPR! Adjustment of mortgage policy

Release time:Apr 16, 2024 20:46 PM

Guangzhou, a first tier city that has shown positive performance in this round of real estate regulation, has once again led the way in introducing new favorable policies.

Recently, the lower limit of commercial loan interest rates for first homes in Guangzhou has exceeded LPR and dropped to LPR-10BP, making Guangzhou the first first first tier city to break through LPR. After the policy of "recognizing houses but not loans" was first introduced in first tier cities, Guangzhou continues to make efforts to adjust its real estate policies. How is the market response now?

First in first tier cities

Guangzhou Continuously Adjusts Housing Loan Policies

According to Guangzhou Daily, the latest policy in Guangzhou is that the minimum down payment ratio for commercial personal housing loans for the first home is not less than 30%, and the lower limit of the interest rate is LPR-10BP; The minimum down payment ratio for commercial personal housing loans for second homes is not less than 40%, and the lower limit of the interest rate is LPR+30BP; There are 2 or more units in Guangzhou, and distribution is temporarily suspended.

The new policy will be implemented from September 8th. For those who have completed the online signing of sales contracts or real estate sales contracts before September 8th, the original regulations will be followed.

This policy is based on the "Notice on Adjusting and Optimizing Differentiated Housing Credit Policies" issued by the People's Bank of China and the State Administration of Financial Supervision on August 31, which stipulates that the minimum down payment ratio policy for commercial personal housing loans for the first and second homes is uniformly set at no less than 20% and 30%. In terms of interest rates, the lower limit of the interest rate policy for commercial personal housing loans for first homes shall be implemented in accordance with the current regulations, which is no less than the corresponding LPR minus 20 basis points; The lower limit of the interest rate policy for commercial personal housing loans for second homes has been adjusted to not less than the corresponding period LPR plus 20 basis points.

Market insiders say that although the down payment ratio for Guangzhou's first home loans has not been lowered to the previously expected 20%, it is still 30%. But the minimum down payment ratio for purchasing a second home has been reduced to 40%, exceeding market expectations. Previously, the down payment ratio in Guangzhou was 50% or 70%.

"Compared to the policy before the adjustment, the down payment ratio for second home loans has been significantly reduced after the adjustment. If there is one house but no loan or the loan has been paid off, the down payment ratio has decreased by 20%; if there is one house but the loan has not been paid off, the down payment ratio has decreased by 30%. At the same time, the loan interest rate has also significantly decreased compared to the previous LPR+60bp." explained Chen Xueqiang, the research director of the Guangzhou branch of China Index Research Institute.

"Lowering the down payment ratio and interest rate for second home loans is mainly aimed at the improving population who own a house in Guangzhou and have a certain payment ability. There is no need to replace it with 'sell one buy one', and it is also conducive to accelerating the release of demand for second home improvement." Chen Xueqiang believes that this is different from the previous policy of 'recognize a house but not a loan'. This policy is mainly aimed at the second home purchasing population, greatly reducing the threshold and cost of buying a second home.

At the end of August, the Guangzhou Municipal People's Government issued a notice on optimizing the standards for determining the number of housing units in personal housing loans in our city. This is the first time that the policy of "recognizing houses but not recognizing loans" has been implemented in first tier cities, and is considered to be building momentum for the "golden nine silver ten" real estate market in Guangzhou.

Can "Combination Fist" Help "Gold Nine Silver Ten"?

"From September 2nd to 3rd, the new policy was just announced, but the weather was not very good, so the number of people coming to see houses in person did not increase significantly. Last weekend was a stable but rising trend. However, there were more online and phone inquiries, most of which were just in need of changing houses. However, the actual proportion of transactions is not significant, and the price increase has not yet been considered." A real estate agent in Guangzhou told reporters.

Ms. Huang, a resident of Guangzhou, just booked a house recently. "My family and friends have all said that they feel the housing prices will still drop a bit, so they are not in a hurry to buy. But we are just in need of buying a house, and our children will be going to school next year, so we bought a school district house." Ms. Huang said that the biggest feeling after buying a house is that the school district house is still very popular, especially in good school districts such as Yuexiu District and Zhuhai District, where we don't have to worry about selling.

But as a seller, Ms. Lin, a Guangzhou resident, is much more conflicted. "We want to sell our current house and buy another one, which is an improvement and replacement. The property has been on sale for half a year and has already dropped by almost 200000 yuan, but it has not been sold yet." Ms. Lin said that there are some homeowners in her community who are not particularly good at the floor, and they may directly lower the price by 400000 yuan or 500000 yuan. Buyers see this and hope to buy a good floor at this low price. If the homeowners don't sell, they don't worry because everyone has a wait-and-see mentality.

"Observing" and "not in a hurry" seem to be the common mentality among many Guangzhou homebuyers in recent days. According to data monitoring from Zhongzhi Research Institute, the transaction volume of new houses in Guangzhou has been continuously declining for four consecutive months since April this year. In August 2023, the transaction volume of new houses was 504000 square meters, a decrease of 0.6% month on month and 25.7% year-on-year. The current market transaction volume is at a historical low level.

Continuously introducing new policies

How much incentive can it bring to the Guangzhou real estate market?

Zhang Hongwei, founder of Mirror Mirror Consulting, believes that areas such as Zengcheng, Conghua, Huadu, and Baiyun non core areas in Guangzhou have large inventory levels and are basically areas for first-time home purchases. Homebuyers in these areas will benefit from the discount of the first home interest rate LPR-10BP in Guangzhou, which will help the real estate market in these areas further digest inventory.

"This is first beneficial for the demand for house changes, including the demand for 'selling one to buy one', especially the demand for second homes, including buying houses for parents and children, as well as investment needs, in line with the new situation in the new housing market where improvement is the main focus and large unit sizes are the main focus." Li Yujia, Chief Researcher of the Housing Policy Research Center of Guangdong Urban Planning Institute, said that the release of small unit sizes and low price housing resources from the demand for house changes can also drive the entry of first-time buyers into the market, especially those who are eager to get married, work, have children, and other groups.

"However, the year-end market recovery brought about by this favorable policy may weaken the pulse response by the end of the year or even November. Whether the real estate market can stabilize in the future still depends on the fundamental recovery trend." Li Yujia believes.

Chen Xueqiang believes that with the implementation of the policy of "recognizing a house but not a loan" for the first home in Guangzhou and a significant reduction in the down payment ratio and interest rate for the second home, it will significantly boost confidence in the real estate market in the short term. At the same time, the rigid beneficiaries and improving population will also accelerate their entry into the market. At the next "golden nine silver ten" node, developers will also use the policy window period to accelerate the pace of promotion, and the Guangzhou real estate market is expected to be "golden nine silver ten".

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