Financial Services Association, April 15 (Reporter Liang Kezhi) According to the latest official data, the inversion between mortgage interest rates and corporate loan interest rates over the past five years has finally come to an end under the combined influence of measures such as the central bank's reduction of 0.5 percentage points and leading to a 0.25 percentage point reduction in real interest rates on mortgage loans.

On Friday, the central bank released financial data for March and the first quarter. It is worth noting that according to data provided by the central bank, the weighted average interest rate for new corporate loans in March was 3.75%, 1 basis point lower than the previous month and 22 basis points lower than the same period last year; the interest rate for new personal housing loans in March was 3.71%, 15 basis points lower than the previous month, and 46 basis points lower than the same period last year.

According to historical data compiled by the 21st Century Economic Report, since the data was released in June 2019, the weighted average interest rate for personal housing loans has always been higher than the weighted average interest rate for corporate loans.

Mortgage loans have improved month-on-month, and demand still needs to be boosted

According to central bank data, although interest rates on new mortgages were lower than interest rates for corporate loans in the same month, short-term loans and medium- to long-term loans for residents increased by 4908 billion yuan and 451.6 billion yuan respectively in March, down 1186 billion and 183.2 billion yuan, respectively.

However, from a month-on-month perspective, mortgage loans were gradually improving in March. Household loans increased by 940.6 billion yuan in March, a year-on-year decrease of 304.1 billion yuan, but there was a sharp increase of 1.53 trillion yuan over the previous month. Mortgage loans increased by 9776 billion yuan and 555.4 billion yuan respectively in March, showing that property market policies have been effective since the Spring Festival.

On April 13, Minsheng Bank economist Wen Bin issued an opinion that interest rates on new personal housing loans issued in March fell to 3.71%, 15 basis points lower than the previous month and 46 basis points lower than the same period last year. The continued decline in interest rates on loans has further reduced the interest burden on corporate residents, which not only stimulates the credit needs of corporate residents, but also helps maintain the steady and healthy development of the real estate market.

On April 15, two chief analysts of the brokerage banking industry told the Financial Federation that from the perspective of bank operations, there is no direct impact on whether corporate loan interest rates or mortgage interest rates are higher or lower.

However, according to some market participants, the trend in mortgage interest rates will still be a factor affecting the desire to buy a home at present.

On April 15, a regional director of Zhongyuan Real Estate in Guangzhou told the Financial Federation that the relaxation of purchase restrictions since last year has improved second-hand market transactions to a certain extent, but now market wait-and-see sentiment has not dissipated; first-hand second-hand transactions are mainly concentrated around the core region and business district. Buyers are worried about debt capacity and falling housing prices. Overall, the market doesn't feel very good.

Whether the current pattern can be maintained is unknown, but the market expects the April LPR to remain unchanged

Mortgage loan interest rates in March were lower than corporate loans. Can they be maintained in the future? Currently, market views are inconsistent. One important factor is clearly the pace at which LPR interest rates will decline in the future.

According to data from Zhongtai Securities, the transaction area of commercial housing in the top 10 and 30 cities in March was 1,490 and 284,400 square meters respectively, all lower than the same period in previous years, and even lower than during the 2020 pandemic. However, in the first half of April, the commercial housing transaction area in the top 10 and 30 cities was 11.01 and 307,000 square meters respectively, which is still lower than the same period last year, and the recovery of the property market still needs further observation.

On April 15, the central bank launched a 2 billion yuan open market reverse repurchase operation and a 100 billion yuan medium-term loan facility (MLF) operation. Interest rates remained unchanged.

Dongfang Jincheng Wang Qing believes that the unchanged MLF operating interest rate in April is in line with the general expectations of the market. It is mainly due to the implementation of an overall downgrade in February, a sharp drop in LPR prices for a period of 5 years or more, and a continuous upward trend in the economy in the first quarter. Currently, it is not very urgent to implement policy interest rate cuts.

Generally speaking, LPR is anchored in MLF interest rates, and LPR will also be lowered after MLF is lowered. Therefore, against the backdrop of no changes in the MLF, it is expected that the LPR may remain “on hold” in April.

Looking at the future of the property market, Wen Bin judged that as policies on both sides of the real estate supply and demand side continue to be optimized and adjusted, buyers' will to buy homes may be moderately restored, and financing support for superimposed “white list” projects will continue to be implemented. The promotion of project construction will also help boost market confidence, which in turn will drive a marginal improvement in new home sales.

However, Wen Bin believes that the recovery of housing loans will be a long-term process. In his view, the continued restoration of residents' credit is still mainly affected by long-term variables such as employment and income. Taking a step back, even in a context where residents' income expectations have yet to be improved and return on asset-side investment is declining, the early repayment rate may still be high.