htmlOn September 29, People's Bank of China and China Banking and Insurance Regulatory Commission issued a notice, deciding to phased adjustment of differentiated housing credit policies. City governments that meet the conditions may independently decide to maintain, lower or cancel the interest rate limit for the first-home loan issued in the local area before the end of 2022. According to the new policy, for cities where the sales prices of newly built commercial housing have been declining month-on-month and year-on-year in June-August 2022, the lower limit on the interest rate of commercial personal housing loans for the first home will be temporarily relaxed before the end of 2022. The lower limit of the interest rate policy for commercial personal housing loans for second-home housing units shall be implemented in accordance with the current regulations.
first-time housing commercial personal housing loan interest rate is expected to be lower than 4.1%
According to , the National Interbank Offering Center authorized by the People's Bank of China , the quotation interest rate of loan market on September 20, 2022 is: the 1-year LPR is 3.65%, and the LPR for more than 5 years is 4.3%, both of which remain unchanged.
According to regulations, the interest rate for the first personal housing loan issued shall not be lower than the corresponding term LPR (based on the LPR for 5 years or more on September 20th); the interest rate for the second personal housing loan shall not be lower than the corresponding term LPR plus 60 basis points (based on the LPR for 5 years or more on September 20th)
Also, on May 15 this year, the People's Bank of China and the China Banking and Insurance Regulatory Commission issued the " Notice on Issues Related to Adjusting Differentiated Housing Credit Policy ". For residents who purchase ordinary self-occupied housing loans, the lower limit of the first housing commercial personal housing loan interest rate is adjusted to not less than the corresponding term loan market quotation rate by 20 basis points, and the lower limit of the second housing commercial personal housing loan interest rate policy shall be implemented in accordance with the current regulations.
Therefore, the lower limit of the first mortgage interest rate in various places was 4.1%.
According to the latest policies issued by the People's Bank of China and the China Banking and Insurance Regulatory Commission, city governments that meet the conditions can independently decide to maintain, lower or cancel the interest rate limit for the first-home loans issued in the local area before the end of 2022.
Yan Yuejin, research director of the think tank center of E-House Research Institute, pointed out that this policy, based on the previous 20 basis points reduction of the lower limit of mortgage interest rates, allows a larger basis point, or further downgrade on the basis of the 4.1% interest rate.
23 cities meet the new policy threshold
In accordance with the requirements, cities that allow the reduction of the interest rate for newly issued first-home loans this time are mainly aimed at cities where the sales prices of newly built commercial housing have been falling month-on-month and year-on-year in June-August 2022.
Industry insiders believe that this time, the central bank clarifies that cities with excessive housing prices can use this tool, that is, it is mainly aimed at cities with weak real estate markets.
According to the data provided by the think tank center of the E-House Research Institute, at least 23 cities in the 70 large and medium-sized cities of the National Bureau of Statistics meet the requirements of the central bank's new policy. Specifically, it includes Harbin, Lanzhou, Wuhan, Dalian, Tianjin, Shijiazhuang, Kunming, Guiyang, Quanzhou , Wenzhou , Luzhou , Yueyang , Yichang , Beihai , Dali , Qinhuangdao , Zhanjiang , Baotou , Anqing , Jining , Changde , Xiangyang and Guilin.
new policy points out that in accordance with the principle of "policy based on the city", city governments that meet the conditions can independently decide to maintain, lower or cancel the interest rate limit for commercial personal housing loans for local first-home housing in accordance with changes in the local real estate market situation and regulatory requirements. The People's Bank of China and the China Banking and Insurance Regulatory Commission will send agencies to guide the provincial market interest rate pricing self-discipline mechanism to cooperate in the implementation.
Judging from the current mortgage interest rates implemented in various places, according to the monitoring data of Beike Research Institute, affected by the reduction of LPR for more than 5 years on August 22, the mortgage interest rates in 100 cities in September were all lowered. As of September 19, the mainstream mortgage interest rates in 86 cities have been as low as 4.10% of the first house and 4.90% of the second house. At the same time, the mortgage interest rates in first-tier cities are the highest, with the average first-tier home being 4.6%, the average second-tier home being 5.13%, and the average interest rate level in second- and third-tier cities is close to the lower limit. The website of the central bank shows that the introduction of this policy measure will help support urban governments to make full use of the policy toolbox for "taking policies based on the city" and promote the stable and healthy development of the real estate market.Within the scope of local policies, banks and customers can negotiate to determine the specific interest rate level of newly issued first-home loans, which will help reduce residents' interest expenses and better support rigid housing demand.
Market Research Director of the Index Business Department of the China Index Academy pointed out that since 2022, more than 800 optimizations of real estate market policies have been optimized across the country, but the overall policy effect is not obvious. According to China Index data, in September, the year-on-year decline in the transaction area of commercial housing in key 100 cities still exceeded 20%. The "Golden Nine" quality is insufficient, home buyers are in a sluggish mood to buy properties and have a strong wait-and-see mood. Real estate has become a key factor dragging down the stable recovery of the macro economy.
Chen Wenjing said that at present, the downward trend of the real estate market has not yet been significantly improved. This time, the People's Bank of China and the China Banking and Insurance Regulatory Commission have phased adjustments to differentiated housing credit policies, which is conducive to reducing housing purchase costs and stimulating the demand for home purchases. However, the current real estate market expectations are generally weak. In the fourth quarter, policies need to be optimized with greater efforts, larger scope and faster pace, especially for core second-tier cities, moderately allowing the market popularity of cities with better fundamentals to rebound, creating a demonstration effect, and helping to drive the recovery of overall market expectations.
