At present, the real estate market is experiencing a series of positive changes. On the one hand, the interest rate and down payment ratio of the first home loan in many places have declined, and the decline in market sales has narrowed significantly; On the other hand, the financing environment of real estate enterprises continued to improve, and the decline in real estate development investment narrowed.
Further release demand
Releasing rigid and improved housing demand is a key measure to promote the healthy and sustainable development of real estate. Reducing the mortgage interest rate and the down payment ratio will help to further release market demand.
The data shows that in March this year, the interest rate of the first mainstream mortgage in Shell Baicheng averaged 4.02%, a slight decrease of 2 basis points from last month; The average interest rate of the second mainstream mortgage was 4.91%, which was the same as last month. From the perspective of interest rate reduction, the mortgage interest rates in third-and fourth-tier cities dropped the most year-on-year, with the first and second mortgage interest rates dropping by 140 basis points and 75 basis points respectively.
"As of the end of December 2022, the average interest rate of newly issued personal housing loans dropped by about 140 basis points compared with the end of last year. Except for a few hot cities, the lower limit of the down payment ratio policy in most cities has reached the national bottom line. " Pan Gongsheng, deputy governor of the People’s Bank of China, said that from the demand side, the implementation of differentiated housing credit policies and continuous guidance of the real interest rate and down payment ratio will better support the rigid and improved housing demand.
At the same time, the speed of bank lending has also increased. The data shows that the average lending period of Shell Baicheng Bank in March was 21 days, which was 7 days shorter than last month. "For banks, housing mortgage loans are still high-quality assets." Ceng Gang, director of the Shanghai Finance and Development Laboratory, said that the credit scale of commercial banks was relatively abundant in the first quarter, which also improved the lending speed to some extent.
"Driven by a series of policies, there have been some positive changes in the real estate market, mainly in the obvious narrowing of the decline in market sales." Fu Linghui, director of the National Statistics Department of the National Bureau of Statistics, said that in the first two months of this year, the sales area of commercial housing decreased by 3.6% year-on-year, and the decline narrowed by 20.7 percentage points.
Repair supply-side expectation
In addition to the demand side, there have also been many positive changes in the supply side. The data shows that the investment in real estate development in the first two months decreased by 5.7% year-on-year, which was 4.3 percentage points narrower than that in 2022. The funds in place of real estate development enterprises decreased by 15.2%, and the decline narrowed by 10.7 percentage points; The prosperity index of real estate development in February was 94.67, which was higher than that in January.
"At present, China’s economy is stabilizing and picking up, and it is expected to improve, which will help narrow the decline in real estate investment." Lou Feipeng, a researcher at China Postal Savings Bank, said that the financial management department has introduced a number of policies and measures to improve the financing of real estate enterprises, and the financing of credit, bonds and equity has been "three arrows in one go" to continuously alleviate the financial pressure of real estate enterprises.
Since last year, the financial management department has issued 16 policies and measures to support the stable and healthy development of the real estate market, and has continued to promote the refinement and implementation of the policies. At present, the financial management department is carrying out four actions of "asset activation", "debt continuation", "equity supplement" and "expected promotion" to fully implement the plan to improve the balance sheet of high-quality housing enterprises. At the same time, we will slow down the excessive risk aversion of financial institutions and guide them to provide normal financing. Data show that in January this year, real estate development loans increased by more than 370 billion yuan, an increase of 220 billion yuan year-on-year.
In addition to improving the financing environment, the credit risk of the real estate industry has also converged. "We believe that in the past, the risk spread trend of housing enterprises has been curbed and the liquidity of housing enterprises has been significantly improved." Hu Gang, vice president of CITIC Bank, said. The 2022 annual report recently released by CITIC Bank shows that by the end of December 2022, the asset quality of the bank’s real estate industry and construction industry continued to show an improvement trend, and the balance of non-performing loans in the two industries decreased by 1.789 billion yuan and 1.251 billion yuan respectively compared with the end of last year.
"Although the financing environment has improved, the willingness of housing enterprises, especially private housing enterprises, to start new construction is still insufficient." Wen Bin, chief economist of China Minsheng Bank, said that it is expected that the growth rate of real estate development investment will still fluctuate in the process of recovery. Lou Feipeng believes that the main reason for this phenomenon is that the expectations of housing enterprises are still poor, so it is necessary to comprehensively stabilize and improve expectations.
Increasing confidence remains the key.
In February this year, the sales price of new commercial housing in first-tier cities rose by 0.2% month-on-month, the same as last month; The sales price of second-hand houses rose by 0.7% month-on-month, with an increase of 0.3 percentage points over the previous month.
"At present, the rebound of the second-hand housing market and the market heat are slightly higher than those of the new housing market." Wen Bin said that on the whole, the sustainability of the market recovery remains to be seen.
"The uncertainty of second-hand housing is low, and its demand depends on the expectations of buyers and rigid demand. In contrast, there is uncertainty in new houses, and the failure to deliver some houses on time has affected the willingness of buyers. " Ceng Gang said.
Luo Yifei, chief statistician of the Investment Department of the National Bureau of Statistics, said that it is necessary to continuously release the rigidity of the real estate market and the demand for improved housing, promote the construction of the "Baojiaolou" project, and gradually boost market confidence. "Last year, the policy of" guaranteeing the delivery of buildings "played an important role in ensuring people’s livelihood." Fu Linghui said. At present, the regulatory authorities have launched a special loan of 350 billion yuan for Baojiaolou, set up a loan support plan of 200 billion yuan for Baojiaolou and a loan support plan of 100 billion yuan for rental housing, and guided financial institutions to promote industry restructuring and mergers and acquisitions to speed up the marketization of risks.
"The most important thing now is to look at the changes in market confidence and demand side, mainly the changes in first-hand housing sales." Hu Wei said. The sale of first-hand houses means that housing enterprises sell new houses directly to individual customers. Its warming means that the funds of housing enterprises are returning to the good, which helps to alleviate the financial pressure of housing enterprises and resolve risks. "In real estate transactions, although the situation varies from place to place, on the whole, the transaction volume of first-hand houses is large, and the recovery of sales represents a rebound in demand, which has certain guiding significance for the judgment of the real estate market trend." Yan Feipeng said.
"The recent RRR cut implemented by the central bank can increase the medium and long-term loanable funds, which will help enhance the enthusiasm of financial institutions to support the financing of housing enterprises and meet the reasonable financing needs of housing enterprises." Wen Bin said that the RRR cut will release low-cost funds and help support rigid and improved housing demand through differentiated loan interest rates.
"At present, it is necessary to further stabilize the income growth expectations of residents." Ceng Gang said that for residents, mortgage is a long-term debt, and their willingness to spend and ability to pay debts depend on their stable employment and income growth. Therefore, it is necessary to increase the income of urban and rural residents through multiple channels and maintain the overall stability of the price situation.
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