The central bank's "517" new policy on housing loans has finally "landed" in Beijing.
On June 26, Beijing issued a new policy for the property market, and the minimum down payment ratio for the purchase of the first house was adjusted to no less than 20%. So far, the property market policy adjustments in first-tier cities have all been implemented.
The real estate market in first-tier cities is the vane of the national property market. So, after the new policies for the property market in the four first-tier cities are all implemented, what are the specific changes at the policy level? What is the follow-up trend of the property market?
The new policies for the property market in the four first-tier cities have all been implemented
On May 17, the People's Bank of China issued three important notices in succession, announcing the cancellation of the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level, the reduction of the interest rate of personal housing provident fund loans, and the adjustment of the minimum down payment ratio of personal housing loans.
Subsequently, the policy effect gradually emerged, and many cities responded positively within a few days, making adjustments in the down payment ratio of the first home and the interest rate of commercial loans. As the "vane" of the property market, the first-tier cities have also taken action.
On May 27, Shanghai took the lead in implementing the "517 New Deal for the Property Market", in which the down payment of commercial loans was reduced from 30% to 20% for the first house, from 50% to 35% for the second house, and 30% for the key six districts; The interest rate of commercial loans was reduced from 3.85% to 3.5% for the first set, from 4.25% to 3.9% for the second set, and 3.7% for the six key districts. The loan amount of the family provident fund was adjusted from 1.2 million yuan to 1.6 million yuan for the first set, and the loan amount for the second set was adjusted from 1 million yuan to 1.3 million yuan, and the loan amount for families with many children was increased by 20%.
On May 28, Guangzhou followed up on the implementation policy, reducing the minimum down payment ratio of commercial loans for the first home from 30% to 15%, and the down payment for the second house to 25%, and canceling the lower limit of the interest rate for the first home and the second home. On the same day, Shenzhen announced that it would reduce the minimum down payment ratio and the lower limit of interest rate for personal housing loans from May 29.
From the perspective of market performance, after the implementation of the "517 New Deal for the Property Market", Shanghai, Guangzhou, and Shenzhen have all quickly followed up the relevant measures, and the activity of the new and second-hand housing markets has increased, especially the second-hand housing transactions in Shanghai have increased significantly. According to the data monitored by the China Index Research Institute, in June, the daily average transaction volume of new and second-hand houses in Shanghai increased by 11.1% and 40.5% respectively compared with May.
On the evening of June 26, Beijing issued a new policy for the property market, clarifying that the minimum down payment ratio for the first home loan was adjusted to 20%, so far, the minimum down payment ratio for the first home loan in the four major first-tier cities in China has been adjusted to 20%, which will further reduce the threshold for buying a house.
It is understood that according to the "Notice on Optimizing the Policies and Measures for the Stable and Healthy Development of the Real Estate Market in the City" jointly issued by multiple departments in Beijing, the content mainly includes adjusting the minimum down payment ratio for the first home to 20%; The lower limit of the interest rate for the first home loan with a term of more than 5 years has been reduced to 3.5%; The minimum down payment for CPF loans has been reduced to 20%; The purchase of a second home by a multi-child family is recognized as the first one; Carry out housing "trade-in" activities, etc. After the adjustment of the property market policy, the central bank's "517" new mortgage policy has been implemented in the four first-tier cities.
Similar to other cities, Beijing's new property market policy is also tilted towards the policy of multi-child families. Among them, for multi-child families with two or more children with household registration in Beijing, the purchase of a second house will be recognized as the first house in the personal housing loan, which will promote the release of housing demand for multi-child families, thereby driving the improvement of market activity.
People in the real estate industry pointed out that after the launch of the central bank's "517" new policy on housing loans, various provinces and cities in China have followed up and successively introduced localized policy rules. As far as Nanjing's real estate market is concerned, after the "517" new deal, the confidence of real estate companies has increased, and 36 commercial housing projects in the city have applied for listing and sales in May, an increase of 8.6% compared with the average monthly listing volume from January to April, and the average transaction price of commercial residential buildings in the month has also increased by 2.4 percentage points compared with April. In terms of second-hand housing, although the price of second-hand housing in Nanjing fell by 0.6% month-on-month in May, the decline was smaller than that of Shanghai, Hangzhou, Ningbo, Hefei, Suzhou and other surrounding key cities, and the month-on-month price increase ranked second among the 22 real estate "one city, one policy" cities and 15 sub-provincial cities.
What is the trend of the property market in the future
According to the data of the Beijing Housing and Urban-Rural Development Commission, 13,383 second-hand houses were signed online in Beijing in May, down 0.2% from April and up 3.1% year-on-year. "The transaction volume of Beijing's second-hand housing market is still good, basically maintaining the contract volume of 12,300 units per month, but the core of the transaction is that small owners are exchanging price for volume." Industry experts believe.
According to the data of the China Index Research Institute, from January to May 2024, the trend of "exchanging price for volume" in the second-hand housing market continued, and the price of second-hand housing in 100 cities fell by 2.91% cumulatively, and the number of cities with a month-on-month decline has exceeded 90 cities for 12 consecutive months; Driven by the entry of improved real estate into the market, the price of new homes in Baicheng has increased by 1.09%.
Chen Wenjing, director of market research at the China Index Research Institute, analyzed that from the perspective of market performance, after the implementation of the "5.17" new deal, Shanghai, Shenzhen and Guangzhou have quickly followed up the relevant measures, and the activity of the new and second-hand housing markets has increased, especially the second-hand housing transactions in Shanghai have increased significantly, and the sentiment of buying houses in Beijing has also rebounded, and the transaction volume of second-hand houses has maintained a certain scale, but the performance of the new housing market is still weak, and the market continues to adjust.
According to the survey data of the China Index, in May 2024, driven by a number of favorable policies, residents' willingness to buy a house was basically the same as that of the previous month, the proportion of respondents who chose "a stronger willingness to buy a house than the previous month" was basically the same as that of the previous month, and the proportion of "a willingness to buy a house weaker than the previous month" decreased by 1.1 percentage points month-on-month, and the market confidence improved slightly, but the pace of residents entering the market slowed down, and the proportion of respondents who chose to buy a home within one year decreased rapidly, down 5 percentage points from the previous month, of which the proportion of the half-year built-in business plan decreased by 3.7 percentage points.
In the "China Economic and Financial Outlook Report" released on June 26, the Bank of China Research Institute suggested that the demand side should be further strengthened to support policies and stabilize the real estate chain with demand recovery. The first is to comprehensively clean up and reduce taxes and fees related to housing sales; the second is to increase the amount of interest deduction for individual income tax mortgage loans; The third is to actively promote the full liberalization of demand-side restrictions in first-tier and super-first-tier cities, follow up the implementation of minimum loan interest rates, etc., and drive the improvement of national market expectations through the stabilization of volume and price in leading cities.
Yan Yuejin, research director of the E-House Research Institute, said that Beijing, as the last of the four first-tier cities to adjust the mortgage down payment and interest rate policies, means that the policies of the four first-tier cities are generally actively adjusted in place. This creates a very good relaxed environment for buying houses in the second half of the year, which helps to further enhance the market confidence of home buyers and has a positive effect on the subsequent market boost.
Chen Wenjing said that in the short term, the activity of Beijing's real estate market is expected to increase, and the chain of new and second-hand houses is also expected to accelerate the rotation. At the same time, in the second half of the year, driven by policy optimization, the scale of new housing transactions in first-tier cities is expected to recover moderately; The low-base effect in second-, third- and fourth-tier cities has weakened significantly, and the year-on-year decline in the transaction area of new homes may be significantly narrowed. In the second half of the year, with the effect of the core city policy gradually emerging, the national market is also expected to gradually bottom out and stabilize.