Source: Securities Times Author: Wu Jiaming
After the release of a new round of property market policies, property markets in many places showed signs of “recovery.” After the lower mortgage interest rate limit was lifted and down payment ratios lowered at the national level, how to follow up on policies in detail in various regions has become the next thing the market can look forward to most.
Rapid follow-up of the Provident Fund policy
Among many new property market policies, the new Provident Fund policy was implemented most rapidly.
Recently, northern Guangshen, and cities such as Tianjin, Zhuhai, Huizhou, Nanjing, Hefei, Suzhou, and Quanzhou announced lower interest rates on housing provident fund loans. The General Office of the Ministry of Housing and Construction issued a notice yesterday requesting local housing provident fund management centers to do a good job in lowering interest rates on housing provident funds and personal housing loans. The notice suggests that for loans with a term of 1 year or less, the contract interest rate shall be applied without instalments; for loans with a term of 1 year or more, the new interest rate regulations shall be implemented starting on January 1 of the following year according to the corresponding interest rate level, unless otherwise stipulated by the state.
In addition to lowering interest rates, various regions are also reducing residents' housing purchase burdens through various methods. For example, the Shenzhen Provident Fund Center provides free interbank “secured transfer” fund supervision services for second-hand housing; several cities have raised the maximum loan amount for families with many children and households that buy green housing.
Chen Wenjing, director of market research at the China Index Research Institute, said that policies related to the Provident Fund are still one of the important measures to promote the entry of demand for rigid and improved housing in various regions and support the release of demand for home purchases. In order to further reduce housing purchase costs, cities implementing and optimizing “commercial to public” related policies are expected to continue to expand in line with the actual situation of their own provident fund use.
Buyers expect the policy to be implemented as soon as possible
“I'm more concerned about whether the down payment ratio and mortgage interest rates will be adjusted. This will have a direct impact on the cost of buying a home.” At a new home marketing center in Luohu District, Shenzhen, a buyer asked the real estate manager. A real estate manager told reporters that some buyers who are not in a hurry to sign online will also ask if they can delay the online signing period appropriately, hoping to wait until the policy is implemented to enjoy the benefits of the policy. “In recent days, the question I've been asked the most is whether the new policy is being implemented when buying a house now.”
A person from a housing enterprise said that since the policy rules have not yet been introduced and the previous rules are still being implemented for real estate, it is expected that it will take some time before the actual transaction results can be reflected.
In terms of the second-hand housing market, the overall market is still stable. The Shenzhen Leyoujia Research Center compared the price data of owners before and after the New Deal and found that 87% of the owners' prices remained unchanged, 10.8% lowered their prices, and only 2.2% raised their prices. Overall, the mentality of Shenzhen owners was mainly stable after the new property market policy, and price adjustment owners also dominated by those seeking quick sales by cutting prices.
The results are expected to gradually appear
According to public market information, banks in cities such as Hefei and Wuhan have confirmed that they will begin implementing a new policy with a 15% down payment ratio for the first home and a 25% down payment ratio for the second home. Yan Yuejin, research director of the Yiju Research Institute, said that this means that there is room for the down payment ratio to continue to decline everywhere, and it is expected that the down payment ratio for first-tier apartments in second-tier cities may be lowered to 15%.
Mortgage interest rates are an important means of regulating the property market. According to statistics from the China Index Research Institute, up to now, more than 40 cities across the country have phased out the lower interest rate limit for first home loans. Mortgage interest rates have fallen to historic lows, and residents' housing purchase costs have been reduced accordingly. Some industry insiders believe that the new property market policy makes it clear that each region can independently determine whether to set lower interest rate limits and lower levels for commercial personal housing loans in each city within its jurisdiction, and whether first-tier cities such as Guangzhou and Shenzhen will implement the new policy is currently yet to be clarified by each city government department.
Chen Wenjing said that currently, after most cities abolished the lower interest rate limit for first home loans, mortgage interest rates are generally between 3.25% and 3.55%, and interest rates on first home loans in a few cities have dropped to 3.1%. Prior to the new property market policy, with the exception of 8 cities including Guangshen in the north, all other cities had chosen to implement down payment ratios of 20% and 30%. As local down payment ratios and mortgage interest rates continue to be adjusted, the down payment ratio in most cities is expected to implement 15% for the first set and 25% for the second set; in terms of mortgage interest rates, more cities may adjust with reference to the current mortgage interest rate levels in some cities.
Zhang Dawei, chief analyst at Central Plains Real Estate, believes that there are many major policies introduced by the supervisory authorities, but currently only the national Provident Fund policy has been implemented to cut interest rates. As far as the market is concerned, it is still necessary to wait for details on how to implement several other policies in various regions, so it is expected that the impact of the policies will gradually become apparent in the market after this week.
edit/lambor