Lowering the interest rate of mortgage loans, the water released by banks or will it flow into the real estate market?

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 Lowering the interest rate of mortgage loans, the water released by banks or will it flow into the real estate market?


In the last month of 2018, the average interest rate for first-home loans in China was 5.68%, the first decrease in 23 months.

Prior to Rong360s release of this data, interest rates on mortgages declined to varying degrees in many parts of the country, including in the north, in Guangzhou and Shenzhen.

What does it mean to lower mortgage rates? What impact does it have on the property market?

Hou Yutong Mapping of Guoshi Direct Train

Competition among banks

Yi Xianrong, a professor at the School of Economics of Qingdao University, accepted that the current reduction in mortgage interest rates is still a fine-tuning, which is the active adjustment of banks in the market competition, and can also be understood as the concession behavior of banks in the competitive environment.

Because, for banks, housing is still a better asset.

Since 1997, when commercial banks started the business of personal housing mortgage loan, personal housing loan has been playing an important role in household sector debt.

According to a set of data released by the central bank, from 2008 to 2017, the balance of personal housing loans increased from 3 trillion yuan to 21.9 trillion yuan, accounting for 45% to 54% of household sector loans.

Dai Yiyi, chairman of Jinyuan Research Institute of Xiamen University, put forward another point of view in an interview with China News Agency. In his view, the liquidity released by the central banks repeated lowering of the benchmark is also good news for the property market. In the future, some cities may also lower down the down payment ratio for house purchases.

However, in January this year, the central bank announced a reduction in time and clearly stressed that no flooding, pay attention to directional regulation and control.

Gu Yunchang, deputy director of the Housing Policy Expert Committee of the Ministry of Housing and Construction and chairman of the National Association of Real Estate Chambers of Commerce, told China News Agency that this was a sign of counter-cyclical adjustment.

He believes that since September 2018, the real estate market has declined significantly, sales have declined year-on-year, and the real estate market has been cold. In this context, the purpose of adjusting mortgage interest rates is to stabilize the property market and avoid a sustained and substantial downturn in the market.

The specific process of the reduction of mortgage interest rate is that after the reduction of mortgage interest rate, the cost of paying interest will be reduced, and peoples willingness to buy houses will be increased, which is conducive to the stability of the market.

Now make an article on interest rates, if the market continues to decline, some of the more stressed cities may reduce the down payment ratio. Gu Yunchang believes that the key to the change of policy is the effect, which changes with time.

Changes in interest rates on mortgages

In the future, is there any room for a reduction in mortgage rates?

Yi Xianrong believes that the fluctuation of mortgage interest rate is normal on the basis of the benchmark interest rate, and the benchmark interest rate has a greater impact on buyers.

Over the past two years, mortgage interest rates have basically fluctuated around the benchmark interest rate.

With the 317 New Deal in Beijing in 2017 as a node, before that, the interest rate on housing loans once implemented a discount of 85% on the basis of the benchmark interest rate to encourage people to buy houses. After that, the interest rate on housing loans first restored the benchmark, then continuously increased, once rising to 1.2 times of the benchmark, cooling the overheated housing market.

The benchmark interest rate remains unchanged.

Photo Source: Rong360

Rong360 previously released a data show that the benchmark interest rate is at a historic low of 4.9%, even if it rises by 20%, it is equivalent to the benchmark interest rate in 2015.

In other words, the current mortgage rate is still at a historic low.

Yi Xianrong believes that for the buyers, the interest rate of mortgage will fluctuate a little, although it will increase or reduce the purchase cost, but the overall impact is small.

It is worth noting that when the bank tightens, the speed of bank lending will be slower and the auditing will be more strict; when the bank relaxes, the speed of bank lending will be faster and the auditing will be relatively relaxed.

At the beginning of the new year 2019, the central bank decided to cut the reserve ratio of financial institutions by 1 percentage point. Among them, on January 15, 2019 and January 25, 2019, respectively, they were reduced by 0.5 percentage points, releasing a total of about 1.5 trillion yuan of funds.

Will the money flow into the property market again?

Relevant central bank officials said that the reduction is still directional regulation, not flooding, and the direction of sound monetary policy has not changed.

The question is, big banks and small and medium banks, what about you?

Guo Zhitong once attended the small supervision activities of financial services organized by the Financial Committee of the State Council. At the symposium, Zhang Hongxiang, the 13th National Peoples Congress representative, asked a question in front of the heads of many financial institutions and regulatory departments. Why do banks like houses so much?

Thats a real problem.

Source: Guo is responsible editor of through train: Shi Jianlei_NBJ11331