According to reports from Finance Associated Press on June 4th, with the gradual implementation of the "517" real estate policies in various regions, the housing loan interest rates in 100 cities have further decreased, reaching a historical low.

According to data monitored by Ke Research Institute, in May 2024, the average commercial loan interest rate for first-time home buyers in 100 cities dropped to 3.45%, down 12 basis points month-on-month and down 55 basis points year-on-year; the average interest rate for second-time home buyers dropped to 3.9%, down 26 basis points month-on-month and down 101 basis points year-on-year.

It is worth noting that this is the first time since 2019 that the average interest rate for second-time home buyers in the 100 cities has entered the "3-digit number".

"Some cities have not yet clearly specified the specific plans for interest rate adjustments, and it is expected that they will be gradually implemented in the future, driving the continued decline in housing loan interest rates in 100 cities," said an analyst at Ke Research Institute.

On May 17, 2024, the central bank announced the cancellation of the lower limit on commercial personal housing loan interest rate policies for first-time and second-time home buyers at the national level; as for the down payment ratio, the minimum down payment ratio for commercial personal housing loans for first-time home buyers was adjusted to no less than 15%, and the minimum down payment ratio for commercial personal housing loans for second-time home buyers was adjusted to no less than 25%.

After the policy was introduced, various regions actively responded and successively adjusted their housing credit policies. With regard to the down payment ratio for commercial loans, as of the end of May, more than 80% of the cities in the 100 cities have clearly implemented a minimum down payment of 15% for first-time buyers and 25% for second-time buyers.

In terms of city level, in May 2024, the average housing loan interest rates for first-time and second-time home buyers in first-tier cities were 3.59% and 3.98%, respectively, down 29 and 31 basis points from the previous month.

However, as of the end of May, Beijing's credit policy has not been adjusted yet. As for the down payment ratio, the first-time unified down payment ratio is 30%, and the second home down payment ratio is 50% within the six districts of the city and 40% outside the six districts. As for the interest rate, the first and second home loan interest rates in the six districts of the city are 4.05% and 4.55%, respectively, and those outside the six districts of the city are 3.95% and 4.5%, respectively, which are currently the highest levels in the 100 cities.

Shanghai and Shenzhen’s interest rates for first-time homes have both dropped 35 basis points to 3.5%; the lowest interest rates for second-time homes have dropped to 3.7% and 3.9%, respectively, and both cities have clearly stipulated the minimum down payment of 20% for first-time buyers and 30% for second-time buyers. The interest rates for first and second homes in Guangzhou both decreased by 45 basis points to 3.4% and 3.8%, respectively, and the minimum down payment for first-time home buyers and second-time home buyers is 15% and 25%, respectively. It is the city with the loosest credit policy in the first-tier cities.

As for the second-tier cities, the average interest rates for first-time and second-time homes are 3.4% and 3.84%, respectively, down 19 and 33 basis points from the previous month; the interest rate for first-time homes in the third- and fourth-tier cities is 3.46%, down 9 basis points month-on-month, and the interest rate for second-time homes is 3.92%, down 23 basis points month-on-month.

Among them, cities such as Hefei, Zhuhai, and Foshan implement the same interest rates for first-time and second-time homes, and the interest rate difference between first-time and second-time homes in cities such as Hangzhou, Zhengzhou, and Wuhan has narrowed to 10 basis points.

It is worth noting that, among the 100 cities, the lowest interest rate for first-time home buyers is in Zhuzhou, with a rate of 3.0%; the lowest interest rate for second-time home buyers is in Foshan, with a rate of 3.15%.

As for housing provident fund loan interest rates, many places have reduced the interest rates for first-time and second-time buyers for more than 5 years by 0.25 percentage points to 2.85% and 3.325%, respectively. The interest rate for first-time home buyers in Lhasa has dropped to 1.68%, and the interest rate for second-time home buyers has dropped to 2.038%.

Analysts believe that with the combination of policies such as the reduction of down payment and interest rates in various places, the real estate market has started to reduce inventory. "At present, the strength of policy support in various regions has increased significantly, and stimulating demand and resolving risks on the supply side will continue to play a positive role in the future," said an analyst at BOC International.

"The current strength of policy support has increased significantly in various regions, and the stimulation of demand and the resolution of risks on the supply side will continue to play a positive role in the future," said an analyst at BOC International.

"Although the minimum lower limit of the national housing loan interest rate has been canceled and the influence of LPR on housing loan interest rates is relatively weak, it does not affect the expectation that housing loan interest rates will continue to decline in the coming months. It is expected that LPR will continue to decline in the future, and the overall housing loan interest rates will be further lowered," said Zhang Hongwei, founder of Mirror Consultancy.