Source: Gelonghui

On Friday, the central bank announced that starting May 18, interest rates on personal housing provident fund loans will be lowered by 0.25 percentage points.

Over the weekend, according to the interest rate cut by the central bank, Beijing, Shanghai, Shenzhen, Nanjing and other places followed suit and collectively lowered interest rates on provident fund loans.

Many places are following up on lowering interest rates on provident fund loans

In the specific operation, there are differences in the timing of mortgage cuts in various regions.

For loans already issued before May 18, 2024, many places will have to start cutting on January 1 next year, while Shenzhen can cut them on July 1 of this year; loans issued after May 18 will be immediately implemented according to the reduced interest rate.

Personal housing provident fund loans issued by Beijing after May 18, 2024 (inclusive) will be implemented at the adjusted new interest rate.

Unmatured personal housing provident fund loans were issued before May 18, 2024. Starting January 1, 2025, they will be implemented at the new adjusted interest rate.

Staff at the Beijing Housing Provident Fund Management Center also explained that there is no need for lenders to apply separately, and the loan interest rate will automatically be lowered. If the lender does not change the monthly repayment amount, it will automatically be calculated as more principal repayment and less interest.

Personal housing provident fund loans issued before May 18, 2024 in Shenzhen will implement adjusted interest rates starting July 1, 2024.

Personal housing provident fund loans applied for before May 18, 2024 and personal housing provident fund loans applied for after May 18, 2024 (inclusive) will all be subject to adjusted interest rates.

Shanghai, on the other hand, has an adjusted interest rate for loans issued after May 18, 2024 (inclusive).

For loans issued before May 18, 2024, the interest rate of the original loan contract will be implemented; for loans with a term of 1 year or more, the adjusted interest rate will be implemented from January 1, 2025.

Real estate stocks have rebounded more than 50%

Last Friday, the property market ushered in epic benefits. The central bank continued to expand measures: lower interest rates on mortgages from the Provident Fund and down payments on commercial loans, abolish the lower limit on mortgage interest rates, and refinance the 300 billion dollar loan to support local state-owned enterprises to buy commercial housing for use as affordable housing.

In fact, the policy level has been working hard to eliminate the stock of real estate recently, and the stock market's expectations in this regard are also quite sufficient. Hong Kong and A real estate stocks have rebounded sharply from the bottom.

The data shows that from April 25 to May 17, the A-share real estate index rose by a cumulative total of 28.55%, ranking first among the first-tier industry indices. In the same period, the Shanghai and Shenzhen 300 Index rose 6.94%.

Since April 15, the Hong Kong domestic housing stock index has increased by a cumulative total of 52.85%.

Last Friday, premiums and volumes of real estate-themed ETFs soared. Among them, Yinhua Real Estate ETF was close to rising and stopping, with a premium of 1.71%. Huabao Real Estate ETF trading volume reached a record high.

Oma “splashes cold water”

Regarding Friday's policy “combos,” Huatai Securities believes that given its strong policy determination, it is not ruled out that the government will continue to adjust its policy strength after evaluating the actual results of this round of “combo punches” until phased results are achieved.

It is worth emphasizing that currently the more important “rebalancing” force in the real estate market is the market's own process of adjusting and clearing supply, demand, and prices. Given that the current real estate deleveraging cycle may have entered the second half, the marginal effect of this round of policy “combo punch” is expected to be superior to previous rounds.

Zheshang Securities judged that there is no contradiction between the introduction of the current real estate policy and high-quality economic development; the key foundation of the policy is to avoid a “real estate crisis model.”

The probability of the evolution and spread of the real estate dilemma has been drastically reduced, the pricing weight of the inertial decline in real estate data has been reduced, and the market's confidence in real estate policy may have reversed, expectations and reality, or a logical chain of positive feedback. Under the policy idea of a final solution, expectations on the right side of equity may have bottomed out or appeared. Furthermore, the short-term real estate mainline logic may also drive the equity market to rise.

However, Damo downgraded its view on China's real estate sector from “attractive” to “consistent with the big market.”

According to the Damo report, although Chinese real estate stocks have surged about 50% since mid-April, driven by policy relaxation and improved investor sentiment, fundamentals are still weak, and uncertainty in the second half of the year is high.

The implementation of the real estate inventory clean-up plan may be disappointing because the scale of capital falls short of expectations; the housing trade-in policy and the complete lifting of purchase restrictions in high-tier cities may trigger a sharp increase in supply in the secondary market, increasing downward pressure on short-term housing prices.

Damo advises investors to continue to choose defensive stocks, such as$CHINA RES LAND (01109.HK)$,$CHINA OVERSEAS (00688.HK)$und$GREENTOWN CHINA (03900.HK)$, will$LONGFOR GROUP (00960.HK)$und$Poly Developments and Holdings Group (600048.SH)$The rating was lowered from “increasing holdings” to “synchronizing with the market.”

Editor/jayden