Since 2022, residents' willingness to lend has continued to decline. Except for January, the total amount of medium-and long-term loans from February to May is only 400.9 billion yuan. Compared with the sales amount of about 3.8 trillion yuan in the same period, the characteristics of demand and non-debt are very obvious.

The demand for loans remained low, with the household segment of the May credit data still at a low level, with medium-and long-term loans rising 337.9 billion yuan less than the same period last year.

Since 2022, new medium-and long-term loans to residents have reached 742.4 billion yuan in January, and have declined rapidly since February. Even considering the high point in January, it is still 202.4 billion yuan less than that in January 2021, while since the beginning of the year, the monthly increase has reached 354.2 billion yuan less than the same period last year, accumulating a total of 1.8 trillion yuan.

Compared with other sectors, the lending data for the residential sector is still at a low level and much lower than in the same period in 2021.

The current decline in credit has outpaced the decline in demand, and even taking into account the decline in sales, the current loan data is below an all-time low, with the current loan ratio falling to 32 per cent, well below the lowest level since 2015.

According to the sales data and loan data for the first four months, excluding second-hand housing, loans account for only 31%, and the results of the upcoming May sales data are expected to remain unchanged.

According to calculations, since 2015, the ratio between residents' medium-and long-term loans and housing sales has been as low as 37%, from 2021 to as high as 57%, which is 2016. In other words, the current rate of decline in credit is faster than that of demand.

After the LPR5Y lowered the 20bp and the minimum 20bp for the first suite in 2022, the current household loan interest rate is still high, even if the absolute level is close to the historical low level, but the interest rate should match the income growth rate. The current slowdown in household income brought about by the economic slowdown makes the potential interest rate lower than the lowest level in history.

The market has some confidence in the current demand policy, not least because after interest rate cuts and cuts, interest rates begin to move closer to their previous lowest levels.

However, we believe that due to the slowdown in economic growth and the disturbance of the epidemic, resulting in a decline in the growth rate of residents' income and expected uncertainty, there is still room for further reduction in interest rates, which can be lower than the lowest level in history in order to effectively alleviate the trend of residents not in debt.

The housing enterprise-end policy is still the main contradiction in the current real estate market, and it is also the direction with the least policy starting point at present. if we rely on the resident-side policy to reverse the downward situation, it needs to be stronger than every previous cycle, and we expect that the second half of the year is still a high-frequency period of policy.