Recently, there have been continuous supportive policies surrounding real estate. Benefiting from bullish policies, the real estate market has also seen a hot trend.

On October 12th, Vice Minister of Finance Liao Min stated in a press conference at the State Council Information Office that the next step will adhere to strict control of incremental adjustments, optimization of existing stock, and improvement of quality, actively studying and introducing policies and measures favorable for the stable development of real estate.

On the same day, several banks including Bank of China, Agricultural Bank of China, and China Construction Bank announced that they will explicitly make bulk adjustments to the interest rates of existing commercial individual housing loans meeting the criteria on October 25th.

Monitoring information from the China Index Research Institute shows that during the National Day "Golden Week", real estate developers generally increased promotional efforts, with significant increases in property visits and subscriptions in core cities compared to the period before the holiday, resulting in a "better than expected" start to the "Silver October".

The booming real estate market has also put banking business managers into a busy overtime state. A business manager told Interface News reporters that there have been many recent mortgage applications, and the approval and lending process is "very fast".

Booming real estate market drives an increase in mortgage transactions.

Data from 58 Anjuke Research Institute shows that looking at the national online search popularity for new homes, there are clear signs of a warming trend in the real estate market during the Golden Week, with daily new home search popularity rising by approximately 8% compared to September.

The booming real estate market has also boosted the warming up of mortgage business. "The National Day holiday is really busy, we have all been working overtime recently," a business manager at a bank branch in Guangzhou told Interface News reporters.

According to data from the China Banking and Insurance Regulatory Commission, from January to July this year, commercial banks issued new personal housing loans totaling 3.1 trillion yuan. Interviewed experts believe that with the heating up of the property market, commercial banks are expected to see growth in new personal housing loans in the future.

"Most of the newly added home purchases are for end-use and improvement, with end-use accounting for about 60%-70%. This customer group generally needs to take out loans to buy houses, which helps to increase the issuance of new mortgage loans. Secondly, nowadays, personal housing loan interest rates and down payment ratios are both decreasing, which will also support the growth of banks' mortgage loan business." Li Yujia, the chief researcher at the Guangdong Housing Policy Research Center, told Interface News reporters.

Regarding interest rates, Interface News reporters learned from multiple bank business managers that currently, the interest rates for newly issued first-time commercial personal housing loans in Guangzhou are around 3.0% to 3.1%; in Beijing, Shenzhen, and Shanghai, the interest rates for newly issued first-time housing loans are around 3.4%. The first-time housing loan interest rates in the three cities are close to the local lower limit, that is, LPR-45BP.

As for down payments, currently, the minimum down payment ratio for first-time commercial personal housing loans in Beijing, Shanghai, Guangzhou, and Shenzhen is no less than 15%.

For second-hand commercial housing, the minimum down payment ratio for personal housing loans in Guangzhou is not less than 15%; in Beijing and Shenzhen, the minimum down payment ratio is not less than 20% (in the Shenshan Special Cooperation Zone, the minimum down payment ratio for first-time and second-time commercial personal housing loans is no less than 15%); in Shanghai, the minimum down payment ratio is not less than 25%, and the minimum down payment ratio in different policy areas is not less than 20%.

Li Yujia believes that the decrease in down payment ratios significantly lowers the threshold for homebuyers, which is expected to greatly stimulate both home buying and mortgage demand.

"Mortgage loan approvals can be obtained in as quick as 10 days."

The interim report data of listed banks shows a significant decrease in personal housing loan balances. As of the end of the second quarter, the total balance of personal housing loans for the six major state-owned banks was 25.49 trillion yuan, a net decrease of 325.471 billion yuan from the beginning of the year.

According to the central bank data, at the end of the second quarter of 2024, the balance of personal housing loans was 37.79 trillion yuan, a 2.1% year-on-year decrease; the balance of RMB real estate loans was 53.1 trillion yuan, a 1% year-on-year decrease, with a growth rate 0.04 percentage points higher than the end of the previous year.

Faced with the pressure of growing loan balances, commercial banks have been very proactive in mortgage approval and lending business.

The business manager in Guangzhou mentioned to China interface news reporters that the approval and disbursement of mortgages are now very fast, basically within a month. Another bank business manager in Shenzhen stated that it takes only one or two weeks for first-hand property loans to be approved, while second-hand property loans only require one to two weeks.

"Most of this area has already reached the construction cap, and bank mortgages are approved within 10 days." A real estate salesperson in Shenzhen said.

It is worth noting that officials have repeatedly emphasized that commercial banks need to ensure 'disbursement after reaching the cap.'

In June 2003, the People's Bank of China issued a notice on strengthening the management of real estate credit business, specifying that commercial banks can only issue personal housing loans to individuals whose purchased housing structure has been capped. If the borrower applies for a personal commercial property loan, the purchased commercial property must pass the completion acceptance inspection.

In September 2007, the People's Bank of China and the China Banking Regulatory Commission issued a notice on strengthening the management of commercial real estate credit, reiterating that commercial banks can only issue housing loans to individuals whose purchased housing structure has been capped.

Previously, several media outlets reported that several commercial banks in Shenzhen require that personal housing mortgage loans can only be disbursed after reaching the specified cap, starting from July 5th.

According to Li Yujia's observation, the phenomenon of "loan disbursement before reaching the cap" in the current market has somewhat decreased.

This article is reprinted from "Jiemian News", edited by Li Fo for the Financial Information Platform.