The minimum down payment of the first suite is 15%, and the lower limit of the national mortgage interest rate is cancelled. How will the portfolio policy change in the real estate market？

On May 17, the central bank and the General Administration of Financial Supervision successively issued three policies, announcing that the minimum down payment ratio of the first set of housing personal housing loans should be no less than 15%, and the second set should be no less than 25%; Reduce the interest rate of individual housing provident fund loans by 0.25 percentage points; And cancel the lower limit of the interest rate policy for commercial personal housing loans for the first and second homes at the national level.

Ma Hong, a senior researcher at Guangkai Chief Industry Research Institute, pointed out that the last time the interest rate of housing provident fund loans was lowered was in October 2022; Reduce the minimum down payment ratio to August 31, 2023. In view of the housing loan interest rate and down payment ratio, the regulatory authorities released a positive signal of stabilizing the property market by means of policy "combination boxing", providing more preferential policies for buyers, hoping to lower the purchase cost and better meet the rigid and improved housing demand by lowering the purchase threshold.

On the same day, a nationwide video conference was held in Beijing. He Lifeng, member of the Political Bureau of the Communist Party of China (CPC) Central Committee and vice premier of the State Council, pointed out that relevant local governments should proceed from reality and properly dispose of the sold idle stock of residential land by means of recovery and acquisition as appropriate, so as to help housing enterprises with financial difficulties solve their difficulties. In cities with a large inventory of commercial housing, the government can order and purchase some commercial housing at a reasonable price as appropriate for affordable housing.

The industry believes that a series of new policies will help the transformation of commercial housing nationwide, which is expected to accelerate the operation of the domestic commercial housing market in the direction of balance between supply and demand and promote the stable and healthy operation of the real estate market.

The down payment ratio of the first suite is lowered to not less than 15%

On May 17th, the People’s Bank of China and the State Financial Supervision and Administration Bureau issued a notice on the policy of adjusting the minimum down payment ratio of individual housing loans.For households with loans to purchase commercial housing, the minimum down payment ratio of the first set of commercial personal housing loans is adjusted to not less than 15%, and the minimum down payment ratio of the second set of commercial personal housing loans is adjusted to not less than 25%.

On this basis, the provincial branches of the People’s Bank of China and the dispatched offices of the State Financial Supervision and Administration Bureau independently determine the lower limit of the minimum down payment ratio of the first and second sets of commercial personal housing loans in each city under their jurisdiction according to the regulation requirements of the city government and the principle of making policies according to the city.

Chen Wenjing, director of market research of the Central Finger Research Institute, pointed out that after this policy adjustment, the down payment ratio of the first set of housing was reduced to not less than 15%, and that of the second set of housing was not less than 25%, down by 5 percentage points respectively. At present, many places in the country have reduced the down payment ratio to 20% and the second set to 30%. Only a few cities have a higher down payment ratio. For example, the first set of down payment ratios in first-tier cities are all 30%, and the second set ranges from 40% to 50%. After the central bank lowered the lower limit of the down payment ratio, it is expected that more cities will follow suit, and there is room and expectation in first-tier cities to further lower the threshold for home buyers.

Yan Yuejin, research director of Yiju Research Institute, pointed out that the down payment ratio of mortgage has been reduced to 15%, which is the lowest down payment ratio in history, and it is also the most relaxed policy among various housing purchase policies in recent years, indicating that the national level attaches great importance to destocking and supporting reasonable housing consumption demand, which is of great significance to the promotion of mortgage, the rapid release and large-scale release of just-needed and improved housing.

Cancel the lower limit of mortgage interest rate at the national level

On the same day, the People’s Bank of China issued a notice on adjusting the interest rate policy of commercial individual housing loans.Cancel the lower limit of the national commercial personal housing loan interest rate policy for the first and second homes.

The provincial branches of the People’s Bank of China shall guide the self-discipline mechanism of interest rate pricing in provincial markets according to the principle of making policy according to the city, and independently determine whether to set the lower limit and the lower limit level of commercial personal housing loan interest rate in cities within their respective jurisdictions according to the real estate market situation of cities and the regulatory requirements of local governments.

Chen Wenjing pointed out that the lower limit of the interest rate policy for the first and second home loans at the national level should be abolished, and the right to regulate the lower limit of the mortgage interest rate should be given to local governments. Previously, the lower limit of the interest rate of the first and second home loans was LPR-20BP for more than five years and LPR+20BP(4 for more than five years respectively (LPR was 3.95% for more than five years in April), and the lower limit of the interest rate of the first home loan could be cancelled in stages in cities where the price of new houses fell for three consecutive months year-on-year.

According to the data released by the central bank, as of the end of March, among the 343 cities (prefecture level and above) in China, 75 lowered the lower limit of the first home loan interest rate and 64 cancelled the lower limit.

According to the monitoring of the Central Finger Research Institute, Super 20 City announced that the lower limit of the first home loan interest rate will be phased out from April; In May, Nanjing and Hefei successively announced the cancellation of the lower limit of the first home loan interest rate. At present, some banks in some cities have implemented the interest rate of the first home loan at around 3.1%. This time, the central bank canceled the lower limit of the national mortgage interest rate, and the policy benefits extended to the second suite. It is expected that more cities will lower the mortgage interest rate, and the room for lowering the mortgage interest rate in first-tier and core second-tier cities is also expected to open.

Reduce the interest rate of individual housing provident fund loans by 0.25 percentage points.

Another policy concerns provident fund loans.

The People’s Bank of China issued a notice on lowering the interest rate of individual housing provident fund loans. Since May 18, 2024,The interest rate of individual housing provident fund loans will be lowered by 0.25 percentage points, and the interest rates of the first set of individual housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be adjusted to 2.35% and 2.85% respectively.The interest rates of the second set of personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years are adjusted to not less than 2.775% and 3.325% respectively.

Wang Xiaoyu, chief analyst of Zhuge Data Research Center, pointed out that lowering the interest rate of individual housing provident fund loans will enable more employees with stable employment to buy houses at lower cost, enhance their purchasing ability and stimulate employees with stable employment to enter the market.

De-stocking and Implementing the Mode of "Purchasing on behalf of the Agent"

According to Xinhua News Agency, a nationwide video conference was held in Beijing on the 17th. He Lifeng, member of the Political Bureau of the Communist Party of China (CPC) Central Committee and vice premier of the State Council, attended the conference and delivered a speech.

He Lifeng pointed out that,Relevant local governments should proceed from reality and properly dispose of the sold idle residential land by means of recovery and acquisition as appropriate, so as to help housing enterprises with financial difficulties solve their difficulties. In cities with a large inventory of commercial housing, the government can order and purchase some commercial housing at a reasonable price as appropriate for affordable housing.

Yan Yuejin said that the core point of this policy can be summarized as "purchasing on behalf of the agent". This model responds to the previous central government’s "policies and measures to study and digest existing houses and optimize incremental housing", which combines the acquisition and digestion of existing houses with the new construction of affordable housing. It is in line with the market rules and has a very good orientation to organically combine the work of destocking and real estate projects. Recently, including the purchase of housing in Lin ‘an, Hangzhou as public rental housing and the purchase of housing in Dali, Yunnan as guaranteed rental housing, it has a positive effect on digesting the stock and supplementing the increment.

Wang Xiaotong believes that this policy is closely related to the problems in the current real estate market. From the perspective of decontamination, the decontamination cycle of commercial housing reached a new high this year. According to the monitoring data of Zhuge Data Research Center, the decontamination cycle in April was 18 months, which was 0.8 months longer than last month. At present, the destocking pressure in the new housing market has reached a high point. The government’s purchase of commercial housing as an affordable housing to ensure the removal of commercial housing also has a certain positive effect on the delivery of commercial housing. Last year, driven by the special debts of major guaranteed buildings, the growth rate of completion continued to rise, but this year, the growth rate of completion remained negative for three consecutive months. Guaranteed buildings are closely related to people’s livelihood. Only by delivering new houses on time will the concerns of buyers be eliminated and the stable development of the real estate market be promoted.