Opening up the Space for Adjusting the Interest Rate of Existing Personal Housing Loans Experts: Helping to Enhance Residents' Consumption Willingness
2023-08-08
Recently, real estate policies have received positive signals. On August 4th, the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, and the State Administration of Taxation jointly held a press conference, with the theme of "playing a good role in macro policy combination and promoting high-quality economic development". For real estate, the National Development and Reform Commission has clearly stated that it will strengthen policy reserves in better meeting residents' demand for rigid and improved housing, actively expanding effective investment, and continuously unleashing the potential of a super large market. Several industry insiders have expressed the need to view the economic role of residential consumption, real estate, and construction industries, as well as their industrial chains, from a broad perspective. The signals released by various parties are very clear, indicating the importance they attach to the recovery of the real estate market. In fact, the adjustment of interest rates on existing personal housing loans has been frequently voiced by the authorities recently. On August 1st, the People's Bank of China and the State Administration of Foreign Exchange held a work meeting for the second half of 2023, proposing to support the stable and healthy development of the real estate market. Among them, the meeting mentioned "guiding commercial banks to adjust the interest rates of existing personal housing loans in an orderly manner in accordance with the law", indicating that reducing the interest rates of existing housing loans is expected to enter the substantive operational stage as soon as possible. For the social economy, reducing the burden of housing consumption on residents can help improve their willingness and ability to expand consumption and investment, thereby strengthening the confidence of all sectors in the future economic situation. Lowering mortgage interest rates and down payments are important measures to lower the threshold for residents to purchase a house and the cost of purchasing a house, "said Cao Jingjing, General Manager of the Index Business Unit of China Index Research Institute. According to statistics from China Index Research Institute, since 2023, more than 40 cities in China have adjusted the lower limit of first home loan interest rates to below 4%. According to monitoring, the average interest rate on first home loans in key cities in July has dropped to 3.9%, a decrease of over 150 basis points from the high point in 2021, significantly reducing the cost of housing purchases for residents. Currently, there are still about 20 cities with a down payment ratio of 30% or above for their first home and 40% or above for their second home. Cao Jingjing said that some core cities still adopt LPR interest rates for their first home loans with a term of more than 5 years, and there is significant room for policy optimization in the future. Yan Yuejin, Research Director of Yiju Research Institute, stated that this time, he once again mentioned "guiding the downward trend of personal housing loan interest rates and down payment ratios", indicating that reducing down payment and down payment is still an important aspect of adjusting the real estate market policy in the second half of the year, and also means that there is still great room for such policies to continue to be implemented. With the continuous reduction of interest rates on new home loans, in contrast, since 2022, the LPR for five-year and above has only been reduced by 45 basis points. This also means that the interest rate on existing housing loans is much lower than the interest rate on newly purchased housing loans as LPR decreases. In response, Zhang Xu, Chief Fixed Income Analyst at Everbright Securities, stated that, taking into account the sources and applications of residents' funds, the return on financial assets has significantly declined, and residents have access to financing channels with lower interest rates than existing housing loans. In addition, the rapid growth of residents' deposits has reduced the demand for borrowing personal housing loans. Therefore, relatively high interest rates on existing housing loans make early repayment almost inevitable. Previously, the State Council Information Office held a press conference on financial statistical data for the first half of 2023, and the Director of the Monetary Policy Department of the People's Bank of China
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：people.cn
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