Core content:
The five-year LPR declined, and the quoted loan market interest rate (LPR) announced on May 20 was flat for five consecutive months. The one-year LPR remained stable at 3.7%, slightly lower than the market expectation. The five-year LPR interest rate fell 15bps to 4.45%, exceeding market expectations. In May, the open market operation interest rate and MLF interest rate remained unchanged, the one-year LPR interest rate remained unchanged, and the five-year LPR was significantly reduced. This situation broke the previous downward trend of the central bank’s interest rate. The most common order of interest rate adjustment of the central bank is open market operation interest rate, medium-term lending convenience interest rate and LPR interest rate. The decline of 5-year LPR interest rate is more indicative, and plays an obvious role in promoting the decline of long-term loan interest rate.
The minimum interest rate of the first house will reach 4.25%. On May 15, 2022, the central bank and the China Banking and Insurance Regulatory Commission jointly issued the notice on issues related to adjusting the credit policy of the first house of differentiated housing (Yin fa (2022) No. 115), which made it clear that the lower limit of the first house loan interest rate was adjusted to lpr-20bp, and the lower limit of the second house loan interest rate was implemented in accordance with the current provisions. This means that the five-year LPR reaches 4.45% and the interest rate of residents’ first home loan is adjusted to 4.25%.
The 5-year LPR interest rate cut is in line with the trend. Since April, the real estate loan interest rate has continued to decline. On April 27, Zhengzhou Zhongyuan Bank launched a mortgage interest rate lower than the LPR of more than five years. This may be the first time that the mortgage interest rate in the national mortgage market is lower than the LPR of more than 5 years, which is also relatively rare in history. In April, some banks in Wuxi, Linyi, Jinan, Rizhao, Guangzhou, Suzhou, Foshan and other cities have implemented the first mortgage interest rate of 4.6%. It can be said that the 5-year LPR interest rate cut did not go ahead of the market, but took advantage of the trend, which means more.
There is still room for the reduction of real estate interest rate. From the perspective of real estate interest rate, the interest rate of personal housing loan began to fall in March, and there is still room from the bottom of history. There is no change in the overall “housing without speculation” of real estate, but it supports the demand for first suite and improved housing.
The steady growth measures need the continuous introduction of policies. The meeting of the Political Bureau of the CPC Central Committee on April 29 continued to emphasize the importance of steady growth, which needs the coordination of monetary policy and fiscal policy, as well as the further adjustment of the policy level.
The loose monetary policy and fiscal policy will last at least until the third quarter, and may last from August to September according to the policy effect. Given that the United States is in the interest rate hike cycle at this stage, the monetary policy in the second quarter is still considered, and the continuous promotion of the policy takes time, but it can be seen that in view of the economic downturn, the policy that exceeds expectations can be effective.
