On June 17, Caixin learned that a month has passed since the new housing policy was announced on May 17. Since then, various localities across the country have intensified adjustments to down payment ratios and loan rates, while also taking various measures to relax restrictions on home purchases and reduce inventory.

Caixin reporters noticed that, apart from Beijing having yet to follow up on the “517” housing policy, only Shanghai and Shenzhen have lowered the lower limit of mortgage interest rates, while other cities have explicitly cancelled the lower limit and new home loan rates in May have reached a historical low. According to feedback from various places, the policies introduced strengthened expectations of rising house prices and further accelerated the signing of transactions in progress. The reduced down payment ratio objectively lowered the threshold for home purchase and increased consumers' purchasing power.

Industry experts believe that after a series of policy measures are implemented, the real estate market has improved somewhat, especially in core cities, and market data will be relatively optimistic in the following months. Whether the market can continue to recover in the future still depends on the pace and intensity of follow-up policies, as well as improvements in residents' income expectations.

“If core cities continue to optimize real estate policies from both the supply and demand sides, especially if Beijing is able to follow up on the '5.17' new policy, it may further boost market expectations. The short-term core city market is expected to gradually stabilize, thus providing support to the national market,” China Index Academy said.

Sales data for the housing market in May showed a narrower decline, and the newly issued mortgage interest rates hit a historical low.

Since May, there have been continuous positive news in the real estate market. On May 17, regulatory authorities introduced a package of new policies, which explicitly cancelled the national minimum mortgage rate policy, lowered the down payment ratio and housing provident fund loan rate, and proposed the establishment of a 300 billion yuan affordable housing refinancing as a measure to reduce inventory.

Caixin reporters noticed that, from the landing of the mortgage policy, following the introduction of the “517” policy, most cities across the country have quickly implemented relevant policies. As of now, except for Beijing, Shanghai and Shenzhen, all other cities nationwide have explicitly cancelled the lower limit of mortgage interest rates.

With the cancellation of the lower limit of mortgage interest rates, most city commercial banks have made different degrees of adjustments to housing loan rates according to policies and changes in market conditions. Housing loan execution rates have significantly decreased compared with the previous period. According to data from the People's Bank of China, the personal housing loan interest rate for new loans in May was 3.64%, down 6 basis points from the previous month and 53 basis points from the same period last year, reaching a historical low.

"In May, the central and regulatory authorities frequently released policy benefits, and various places actively implemented related measures, obviously boosting market sentiment." According to the latest analysis by China Index Research Institute, in terms of policy effectiveness, nationwide real estate sales in the first five months narrowed their year-on-year decline in sales of commercial housing; sales area and sales volume of commercial housing in May saw a narrower year-on-year decline, indicating a marginal improvement in the market.

In key cities, during the first two weeks of June (May 27th to June 9th), the average weekly transaction area for new homes in the top 50 cities increased by 24.0% compared to May and decreased by 22.3% year-on-year. The decline was less than that in May. The second-hand housing market maintained high activity. In the second week of June (June 3 to June 9), the transaction volume of second-hand houses in the top 11 cities increased for the third consecutive week, and the policy effect was obvious in cities such as Shanghai, Shenzhen and Hangzhou.

However, from the perspective of housing prices, the housing price index for 70 cities nationwide remained on a continuous decline in May. Data released today by the National Bureau of Statistics shows that in May, the price index of new commodity housing in 70 cities nationwide fell by 0.7% month-on-month, dropping for 12 consecutive months; the price index of second-hand housing in 70 cities fell by 1.0% month-on-month, for 13 consecutive months of decline.

The effect of the new policy is having an impact and the future of the market's recovery still depends on the pace and intensity of policy follow-ups.

A month has passed since the "517" new policy was introduced, and the industry generally believes that most areas across the country have successively implemented relevant policies, and the effects of the new policy will gradually emerge.

"The policy itself has a positive effect on continuously reducing the cost of buying a house, strengthening expectations of subscription and signing intentions, and other aspects." Yan Yuejin, research director of the E-House Research Institute, told Caixin reporters that from the feedback from various places, the decrease in the down payment ratio and mortgage interest rates objectively lowered the threshold for home purchase and increased consumers' ability to purchase, while the introduction of the policy also strengthened expectations of rising house prices and further accelerated the signing of transactions in progress.

From future market trends, in the month since the "517" policy was introduced, the viewing volume across the country continued to increase, and some declines in housing prices also began to stop. All of these indicate positive signals for the market stabilizing. "We believe that this type of transaction data will gradually be reflected in the network registration data for the following 6-7 months. In other words, the data for the following months will be relatively optimistic." Yan Yuejin said.

"Policy effects will be reflected in June." Li Yujia, chief researcher of the Guangdong Provincial Urban Planning and Design Research Center's Housing Policy, expects that as policies begin to take effect, transaction volume in hotspot cities will rebound in June, listing gains will slow down, and new home and second-hand housing prices in various cities will also see the end of their declines.

However, he also pointed out that the current policy implementation still needs to be strengthened. On the one hand, the stock purchase of rediscounted loans deployed by the country has not yet been implemented; on the other hand, although the mortgage interest rate has no lower limit, the first-home loan rate has only dropped by about 30 basis points compared to before the new policy, which is still relatively high compared to the risk-free interest rate (10-year national bond rate).

"Overall, with the implementation of multiple policy measures, the sentiment in the real estate market has improved somewhat, especially in core cities where policy effects are emerging. Whether the market can continue to recover in the future still depends on the pace and intensity of policy follow-up, as well as the improvement in residents' income expectations."

China Index Academy believes that if core cities continue to optimize the real estate policies from both supply and demand sides, especially if Beijing can follow up with the "517" new policy, it may further boost market expectations. In the short-term, the core cities market is expected to gradually stabilize and form support for the national market. With the weakening of the mid-year high base effect and the rush of performance for real estate companies in the mid-year, the year-on-year decline in sales of new commodity housing in the country is expected to continue to narrow.