Over the past period of time, even a little positive about real estate seems to have caused a strong reaction in the capital market first.
Affected by the news of the reduction of the down payment ratio in some cities, real estate stocks rose sharply on Friday (February 18). Among them, Tahoe Group Co.Ltd(000732) (000732. SZ) closed the trading limit less than half an hour after the opening. Most stocks continued to rise in the afternoon, and the sector rose more than 3% throughout the day. In the Hong Kong stock market, domestic housing stocks also continued to rise, led by green city China (hk3900), rongchuang China (hk1918) and China Resources Land (hk1109).
In the view of insiders, non purchase restricted cities have sufficient power to boost the confidence of the real estate market through “one city, one policy”. On the one hand, the amount of bank mortgage in the region is sufficient and the adjustment space is large, on the other hand, it can alleviate the pressure of inventory “de conversion”. Prior to this, many cities have made adjustments to the down payment ratio of provident fund loans and commercial loan interest rates, and the optimistic expectations of the sales end in the industry are heating up.
loose down payment ratio
“Compared with second-hand housing, the pressure of new housing decontamination is more important for local people. Non restricted cities, especially small cities in the third and fourth tier, may be liberalized one after another, because there is really a need and necessity in this regard.” For the recent news of reducing the down payment ratio of house purchase in many cities, a person who has worked in the real estate industry in Jiangsu and Zhejiang for many years told the first financial reporter. He believes that taking into account the pressure brought by the downward sales, more cities will follow suit in the future.
Following the news that some banks in Heze reduced the down payment ratio of people who “have no house and no loan” on February 17, the news that the down payment ratio was reduced came from Chongqing, Ganzhou, Jiangxi and other places on February 18. Chongqing intermediary employees revealed that the minimum down payment ratio of the first house in Chongqing has dropped from 30% to 20% since before the Spring Festival.
However, according to the interview with the first financial reporter, the current adjustment is still not a general adjustment, but mostly differentiated adjustments made by individual banks according to their own conditions and needs.
Taking Heze as an example, at present, some large banks and intermediaries said that the down payment ratio has been reduced, but some joint-stock banks have not taken action. For example, according to the reporter, Industrial Bank Co.Ltd(601166) Heze branch’s minimum down payment ratio for the first house is still 25%, or it will rise according to personal credit investigation.
Relevant staff of Heze housing and Urban Rural Development Bureau also confirmed to the first financial reporter by telephone that there is no official notice to reduce the down payment ratio of the first house, which is still the behavior of individual banks. In fact, Heze City has continued the policy requirement that the minimum down payment ratio of the first house is 20% since 2016.
Another example, Industrial And Commercial Bank Of China Limited(601398) a branch in Chongqing also made it clear that it had not received the adjustment notice, and the minimum down payment ratio of the first house still followed the 30% standard.
Nevertheless, many analysts in the real estate industry have given more optimistic predictions.
Xiao Feifei, a bank analyst, said in the research report that the adjustment of the down payment ratio of individual housing loans in Heze City marks the promotion of local adjustment of real estate policy from the supply side and the financial side to the demand side under the framework of “no speculation in housing” and “implementing policies for the city”. Subsequently, the demand side policies, including sales, purchase and loan restrictions, may be further adjusted according to local conditions according to the sales situation.
Du Haomin also believes that the reduction of down payment ratio and mortgage interest rate in Heze and other cities have verified the change of financial institutions’ attitude towards real estate, which is reasonable and urgent for cities with long-term housing price decline. It is expected that more cities will follow up and adjust in the future.
According to the notice on issues related to individual housing loan policies formulated by the central bank and the former CBRC in 2015, in cities that do not implement the “purchase restriction” measures, the minimum down payment ratio of commercial individual housing loans for households to purchase ordinary housing for the first time is 25% in principle, and each place can float down by 5 percentage points, The minimum proportion of improved housing for residents with one suite and outstanding mortgage shall be adjusted to 30%.
The first financial reporter noted that some third and fourth tier city banks have implemented the minimum down payment ratio of 20% for a long time. A person from the Credit Department of a sub branch of Shandong Linyi, a large state-owned bank, told the first finance reporter that the bank’s down payment ratio for the first and second houses has been 25% and 30% respectively for a long time, but if it is a pure commercial loan, it can be applied for at least 20% under the condition of “no house, no loan”, but the final proportion should be determined according to personal credit.
expected improvement on the demand side
Affected by the good news, real estate stocks collectively rose in the secondary market on Friday. As of the closing, the A-share real estate sector rose by more than 3%, of which Tahoe Group Co.Ltd(000732) , Black Peony (Group) Co.Ltd(600510) closed the limit, Macrolink Culturaltainment Development Co.Ltd(000620) , Chongqingyukaifaco.Ltd(000514) , Cccg Real Estate Corporation Limited(000736) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) all rose by more than 8%. In addition, 10 shares such as Jinke Property Group Co.Ltd(000656) and Greentown holdings rose by more than 5%. Real estate stocks in Hong Kong stocks also expanded in the afternoon. The Hang Seng China real estate index rose 2.86%, led by Greentown China, rongchuang China and new town development, with an increase of more than 5%.
Since the fourth quarter of last year, under the frequent voice of supervision and policy correction, many places have been relaxed in terms of mortgage interest rate and lending time. In addition to the impact of LPR quotation reduction, mortgage loans have been raised and lowered in nearly 20 cities such as Guangzhou, Shenzhen, Suzhou and Nanjing, and the first house loan interest rate has gradually increased in cities with “breaking 5”. In 2022, Qingdao, Ji’nan, Ningbo, Fuzhou, Zigong and Beihai issued preferential notices on the housing loans of the provident fund, including the down payment ratio, the loan quota, the relaxation of the loan interval restriction, the convenience of loans in different places, and the cancellation of registered residence restrictions.
Xiao Feifei’s team believes that the reduction of the down payment ratio of “no house, no loan” home buyers marks the opening of the optimization of demand side policies. In the follow-up, all localities are expected to “implement policies according to the city” according to the sales situation, and there is also room for adjustment and optimization of real estate financing policies. She believes that the core of solving the early real estate credit problem is to alleviate the current liquidity, and the expectation of buyers on the demand side (corresponding to sales collection) and the willingness of financial institutions on the financing side (corresponding to continuous financing) are important driving points of real estate policy. Prior to this, developers have been supported by the marginal relaxation of the financing environment, the increased support for the resolution of collection and M & A, and the partial optimization of the supervision of pre-sale funds.
In January this year, the data of social finance and credit both exceeded expectations, but the medium and long-term loans representing residential mortgage loans maintained a year-on-year low increase for two consecutive months, which to some extent reflects that the prosperity of real estate sales has not recovered significantly. A person from an investment consulting agency in the real estate industry told reporters that under the severe debt repayment pressure, operating funds are still the main support for real estate enterprises to extricate themselves from difficulties, and it is particularly necessary to boost the confidence of the demand side. Thus, the expected warming is also the main reason for the response of the secondary market.
