#精品长文创作季#
The real estate market is the hottest market in China since the beginning of the 21st century, and China's housing prices can be described as "flat to high-rise" with a significant increase.
However, in the post-epidemic era, the economy is declining and China's economic development is slowing down, in order to reverse the decline in the development of the real estate market, a new way to play the mortgage has been released, and only 1 yuan of principal needs to be repaid every month!
So what is the deep logic behind the popular "interest first, principal later" mortgage repayment method?
What role will it play in mortgage repayments and can it reverse the current slump in the housing market? Where will the real estate market go in the future?
First, the real estate market has undergone great changes
Since entering the 21st century, China's real estate market has ushered in a golden period of development, and China's housing prices have risen significantly, and the national average house price has even exceeded 11,000 yuan / square meter at its peak.
Behind the continued tightness of the mainland real estate market is the inevitable result of the continuous advancement of urbanization.
As a result of the continuous urbanization, a large number of rural people have migrated to the cities, resulting in a large loss of rural population.
As a result, the educational resources and medical resources in remote villages and towns have gradually become scarce, and people have no choice but to come to live in cities.
In addition, due to the zoning of educational resources, in order to ensure that children have the qualifications to enjoy educational resources, urban housing has become a "necessary topic" for contemporary young people.
And real estate has gradually become a necessity in marriage, which undoubtedly makes commercial housing a rigid need for contemporary young people.
Therefore, for the normal operation of a series of life plans such as marriage, childbirth, education, etc., the number of home buyers continues to grow, and housing prices are rising at the same time.
The continuous rise in housing prices has made it a wealth management product, and a large number of speculators have entered the real estate market, resulting in further increases in property prices.
For ordinary people, millions of real estate at every turn have exhausted their family savings and burdened with heavy loans, but they have to grit their teeth and persist in order to carry out their life plans normally.
However, with the arrival of the epidemic period, the global economy has declined, and the number of unemployed people has increased sharply, so the number of home buyers has decreased.
At the same time, due to the excessively tight real estate market in the past, a large amount of capital has settled in, and real estate projects have sprung up all over the country.
Therefore, the current national real estate market is a stock market, and the supply of commercial housing exceeds demand!
Under the downward trend of the economy, the real estate market industry ushered in a cold winter, so in order to promote the prosperity of the real estate industry, the housing and construction departments, banks, real estate manufacturers, etc. have launched a series of preferential policies in an attempt to reverse the depression of the real estate market.
At present, many banks across the country, including Ping An Bank, Shanghai Pudong Development Bank, Industrial Bank, etc., have launched a unique "interest first, principal later" housing loan business, and the monthly principal of the housing loan can even be as low as 1 yuan, or even directly do not need to be repaid!
The loan repayment strategy of major banks can be said to have aroused heated discussions in the society, so what are the advantages and disadvantages of this loan repayment method for borrowers?
Can the repayment of loans with interest first and principal later reversed the current depression in the real estate market? Or what kind of policies should be adopted to revitalize the real estate market?
2. Pros and cons of the "interest first, principal later" loan repayment method
The repayment method of "interest first, principal later" is a special policy formulated by banks to promote the development of housing loan business.
According to a bank manager, if you want to have less pressure to repay the loan upfront, you can use the "interest first, principal later" mortgage repayment method.
At present, the loan term of the "interest first and principal later" mortgage repayment method of major banks is generally 3 years, that is to say, only the interest needs to be repaid within 3 years, and the principal is not repaid.
After 3 years, you only need to repay the principal once to renew the loan, and you can continue the "interest first and principal later" for 3 years, which can be extended up to 10 years!
And in order to further alleviate the repayment pressure of loan customers, for example, Ping An Bank has also launched a new round of preferential policies.
If the borrower is creditworthy and repays the loan on time during the 3-year "interest-first-post-principal" loan repayment, then the 3-year principal repayment can be averaged over the subsequent loan tenure, further relieving the financial pressure on the borrower.
At present, the "interest first, principal later" loan repayment method of major banks has begun to be implemented, and active trials have been carried out in Shanghai, Hangzhou, Chongqing and other regions.
In fact, the "interest-first-principal-later" approach to loan repayment is nothing new.
As early as 2022, IB has launched the housing loan repayment policy of "pay-as-you-pay", which is also the predecessor of today's "interest first, principal later" loan repayment policy.
The "pay-as-you-pay" housing loan repayment policy, which specifically allows the repayment of principal to be suspended during the loan repayment process in the first three years, plays a vital role in reducing the financial pressure of repayers.
However, it is worth noting that the pros and cons of the "interest first, principal later" loan repayment method are also very obvious, and it has a clear preference for the customer's choice.
For customers who do not have enough money to save, the "interest first, principal later" loan repayment method can alleviate the pressure of loan repayment in previous years, thereby helping home buyers solve their urgent needs.
Although the slogan advertises "monthly principal repayment as low as 1 yuan", it does not mean that the principal can be left unpaid, but evenly distributed over future repayment periods.
Therefore, the "interest first, principal later" loan repayment method is essentially a "delaying measure" to repay the principal.
And because of the fear that the principal repayment forgiveness will not be able to repay the principal after the principal repayment forgiveness expires.
Therefore, in order to avoid losses to banks, banks will conduct strict qualification reviews on borrowers before starting the "interest first, principal later" loan repayment business, and this policy is not applicable to all home buyers.
In addition, for home buyers, the "interest-first-principal-after-principal" loan repayment method will also lead to an increase in the total amount of interest repayments.
Some home buyers believe that the RMB will continue to depreciate in the future, and under the increase in the price level, the inflation in the mainland will continue to be severe.
Therefore, in the future, the purchasing power of the renminbi will decline, and according to the standard of purchasing power, the repayment method of "interest first and principal later" loan will be cost-effective.
Therefore, the public has a polarized attitude towards the "interest first, then principal" policy, and whether to decide to adopt the "interest first, principal later" loan repayment method depends on the specific situation of the person.
The introduction of the "interest first, then capital" policy is a microcosm of the mainland's real estate policy, although in recent years, the mainland's favorable home buying group policy has been introduced, but the effect is not obvious.
So what is the reason why it is difficult for the real estate market to reverse the decline today, and how should the mainland real estate market adjust in the future?
3. Prospects for the future development of the real estate market
2023 is the year with the most frequent announcements of real estate policies in the mainland, among which the policies that are conducive to consumers buying houses are not counted in the number of periods, and the interest rates of housing loans in the mainland are also declining.
In 2023, Hangzhou, Qingdao and other cities in the second-tier cities of the mainland have canceled their purchase restriction policies.
This means that ordinary people who want to buy commercial housing in second-tier cities do not need to undergo qualification review and social security payment time requirements in advance.
In addition, the mainland has also launched the policy of "recognising houses but not loans", heralding the end of the era of "recognising houses and recognising loans".
After that, when ordinary people buy real estate, the name on the real estate certificate and the loan repayer will no longer be the same, further reducing the purchase threshold of commercial housing.
At the same time, the mainland has further reduced mortgage interest rates, according to 2023 statistics, the average home loan interest rate for the first home in the country is 3.86%, while the interest rate for the second home is only 4.41%.
The down payment ratio also ushered in a new low, for example, Hangzhou reduced the down payment ratio to 25% for the first home and 35% for the second home, all in order to reduce the financial pressure of the home buyer group.
Still, the real estate market in 2023 can be described as depressed.
Among them, residential investment, housing sales area, sales volume, etc. have all ushered in varying degrees of decline, and after entering 2024, this data will show an intensifying trend!
So what is the reason why the recovery of the real estate market economy is so difficult?
The main reason for the difficulty of the real estate market is not the housing interest rate, let alone the down payment ratio, but the housing price is still in a high range.
Even though real estate prices are now down from their peak, real estate prices in prime locations in first- and second-tier cities and third- and fourth-tier cities are still firm.
And with the poor performance of the economic situation, once you face unemployment after buying a house, it will lead to a tragic ending of "people go to empty buildings".
Therefore, hundreds of thousands, millions of real estate is still a high consumption that modern people can hardly afford.
In addition, in the economic recession, the importance of personal savings continues to increase, and ordinary people's consumption behavior has become cautious.
Moreover, the reason why the epidemic period has become a watershed in the development of the mainland real estate market is because before the epidemic, the national economy was thriving.
Therefore, even if a house is purchased at a high price, then the commercial house will still have appreciation attributes and still have appreciation value.
However, property prices are now inflated, and as the real estate market continues to slump in the future, there may be room for price reductions, so even those who need to buy a home are waiting for further reductions in property prices.
In the future, if you want to solve the dilemma of today's real estate market, selling at a reduced price is always the most effective way.
epilogue
In order to reverse the dilemma of the development of the real estate market due to the global economic downturn and the recession of the real estate market, major banks have launched the "interest first, principal later" loan repayment method.
It is an attempt to promote the recovery of the real estate market by reducing the pressure on loan repayment.
However, real estate prices are still high, so the "interest first, then capital" policy may not be able to reap good results.
What do you want to say about the new way of playing "interest first and principal later" mortgage? Welcome to leave a message in the comment area to discuss.
Resources:
New Gameplay! Mortgage repayment "interest first and principal later" is on fire, and you only need to repay the principal of 1 yuan per month? Media: Don't be blinded" National Business Daily 2024-06-09
"New way to play with housing loans, "interest before principal" is on fire! Only need to repay the principal of 1 yuan per month? Wall Street News 2024-06-09