In 2023, a series of policies will be introduced to improve demand-side expectations and ensure supply-side security, focusing on the three core issues of how to better meet the demand for rigid and improved housing, how to actively and steadily resolve real estate risks, and how to promote the stable and healthy development of the real estate market. "According to experience, there is usually a time lag of 6 months to 12 months from the policy force to the market effect, and it is expected that the market will have a more obvious performance from the third quarter of 2024 at the earliest. Wen Bin, chief economist of China Minsheng Bank, said.
Improve demand-side expectations.
The trend of real estate demand is not only related to the sales collection, cash flow status and risk resolution of real estate enterprises, but also related to whether the real estate market can develop steadily and healthily. In 2023, relevant policies will start from two aspects: lowering thresholds and reducing costs, improve demand-side expectations, and better meet the demand for rigid and improved housing.
A series of policies have been introduced, such as lowering the threshold, relaxing purchase restrictions, subscribing to houses without loans, optimizing the standard of ordinary houses, and reducing the proportion of down payments, to continue to release reasonable demand for housing purchases. Among them, the "new policies" introduced in Beijing and Shanghai in December 2023 have attracted much attention from the market. Beijing no longer distinguishes between ordinary and non-ordinary residences, and the down payment ratio for the first home is uniformly reduced to 30%.The second house is divided into six urban districts and six non-urban districts, with a down payment ratio of 50% and 40% respectively.
Beike Research Institute believes that the reduction of the down payment ratio of the first and second houses in Beijing and Shanghai will help lower the threshold for entering the market for first-time home buyers and improving housing needsAdjust the criteria for the identification of ordinary houses, and the coverage of the preferential tax policies associated with them will be expandedA combination of policies will better meet the demand for rigid and improved housing.
Cost reduction, driven by a number of policy measures, the interest rates of new and existing mortgages have fallen, reducing the financial burden of home buyers. According to the estimate of the Shell Research Institute, the amount of residential sales in the country in 2023 will be about 16 trillion yuan, and the reduction of mortgage interest rates will save a total of about 18.5 billion yuan in interest for home buyers across the country.
On the one hand, the interest rate reform effect of the loan market continued to be released, driving the interest rate of new and existing housing loans to decline again. For the whole year of 2023, LPR with a term of more than 5 years will be reduced from 43% to 42%。In September 2023, the weighted average interest rate of new personal housing loans issued was 402%, down 032 percentage points;As of the end of September 2023, the weighted average interest rate of existing housing loans was 429%, a significant decrease of 42 basis points from the end of the previous month.
On the other hand, the reduction of the interest rate of the existing first home loan has been carried out in an orderly manner. On August 31, 2023, the People's Bank of China and the State Administration of Financial Supervision and Administration issued the Notice on Matters Related to Reducing the Interest Rate of the Stock First Home Loan, proposing that from September 25, 2023, financial institutions will reduce the interest rate of eligible stock first home loans in accordance with the principles of marketization and rule of law.
The vast majority of borrowers have already enjoyed the benefits for the first time. Zou Lan, director of the Monetary Policy Department of the People's Bank of China, said at the press conference on financial statistics for the third quarter of 2023. As of the end of September 2023, more than 22 trillion yuan of existing mortgage interest rates have been lowered, and the adjusted weighted average interest rate is 427%, an average reduction of 73 basis points, reducing borrowers' interest expenses by 160 billion yuan to 170 billion yuan per year, benefiting about 50 million households, 1500 million people.
In addition, the "Dynamic Adjustment Mechanism for the Interest Rate Policy for the First Home Loan" will continue to be implemented, and more cities will be encouraged to lower or cancel the lower limit of the interest rate for the first home loan. According to the "Report on the Implementation of China's Monetary Policy for the Third Quarter of 2023", as of the end of September 2023, among the 343 cities (prefecture level and above) in China, 119 cities that meet the conditions for relaxing the lower limit of the first home loan interest rate policy have relaxed the lower limit. Among them, 95 cities have lowered the lower limit of the first home loan interest rate, and the lower limit implemented is 10 basis points lower than the national lower limit to 40 basis points, and 24 cities have eliminated the lower limit.
According to the statistics of the Shell Research Institute, at present, the housing demand of residents is still relatively abundant. Among them, the number of new entrusted houses purchased on the Shell platform in 2023 exceeded the number of new entrusted houses for sale by about 10%, and the number of house viewings increased year-on-year, especially after the policy optimization, consumers' confidence in home ownership rebounded significantly, and the proportion of people who plan to buy houses in the next six months rose to 23%, driving the second-hand housing market to rebound steadily in the fourth quarter of 2023.
Do a good job of supply-side security.
Improving expectations on the consumer side should be based on stabilizing the supply side. In the first quarter of 2023, the rebound and market heat of the second-hand housing market are higher than those of the new housing market, which is behind the unstable supply and insufficient demand caused by the inability of some first-hand houses to be delivered on time. To this end, we must do a solid job in ensuring the delivery of buildings, ensuring people's livelihood and ensuring stability, and boost the confidence of first-hand house purchasesSecond, it is necessary to meet the reasonable financing needs of real estate enterprises with different ownership systems without discrimination, and alleviate the liquidity shortage of real estate enterprises.
The solid progress of the work of ensuring the delivery of buildings has driven the year-on-year increase of nearly 20% in the area of housing completions across the country, which also reflects the effectiveness of helping enterprises in various places. Ni Hong, Secretary of the Party Leadership Group and Minister of the Ministry of Housing and Urban-Rural Development, said a few days ago. In addition, the People's Bank of China (PBoC) has extended the term of the RMB 200 billion loan support plan to the end of May 2024.
Tight liquidity is a critical issue for real estate companies. In 2023, bank credit, bond financing, and equity financing will be launched at the same time to stabilize the reasonable financing needs of real estate enterprises and improve the operating and financing cash flow of high-quality real estate enterprises. In January 2023, the financial management department said that it would focus on high-quality real estate enterprises that focus on their main business, operate in compliance, have good qualifications and have certain systemic importance, and carry out four actions: "asset activation", "liability continuation", "equity supplement" and "expectation improvement", so as to guide the balance sheets of high-quality real estate enterprises to return to the safe range.
From the perspective of bank credit, the scale and structure of real estate credit financing are generally stable. According to the "Report on the Implementation of China's Monetary Policy for the Third Quarter of 2023", the balance of real estate loans of major financial institutions (including foreign capital) in the country is 532 trillion yuan, of which the balance of housing development loans is 98 trillion yuan, a year-on-year increase of 22%。Since November 2023, the financing situation of private real estate enterprises has improved, and major banks such as ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications have invested more than 30 billion yuan in real estate development loans to non-state-owned real estate enterprises.
In terms of bond financing, as the 'second arrow' continues to make efforts, the progress of supporting private real estate enterprises to issue bonds and financing has accelerated, and as of the end of November 2023, about 20 private enterprises have issued debt financing instruments exceeding 36 billion yuan. Wen Bin said that this has played an important role in alleviating the financing pressure of private enterprises, guiding the reversal of market expectations, and maintaining the stability of corporate bond financing.
In terms of equity financing, in 2023, relevant explorations will be carried out in both private and public equity**. In February 2023, the China Securities Regulatory Commission (CSRC) launched a pilot project for private equity investment in real estate to promote the revitalization of the real estate marketIn October, in order to further expand the scope of pilot assets of real estate investment trusts** (REITs) in the infrastructure sector, the China Securities Regulatory Commission (CSRC) issued relevant policies to expand the types of pilot assets of public REITs to the consumer infrastructure sector.
Wen Bin believes that it is expected that with the continuous introduction of financing benefits such as "three not less than" and "equal treatment", real estate development investment funds are expected to take the lead in stabilizing and rebounding in 2024. The forum of financial institutions jointly held by the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission a few days ago clearly pointed out that in the future, all financial institutions should thoroughly implement the arrangements of the financial work conference, adhere to the "two unwavering", meet the reasonable financing needs of real estate enterprises of different ownership without discrimination, and do not hesitate to lend, draw loans, and cut off loans for normal real estate enterprisesContinue to make good use of the "second arrow" to support private real estate enterprises to issue bonds for financing;Support real estate enterprises to raise reasonable equity through the capital market.
Build a new model of development.
The Political Bureau of the Communist Party of China held a meeting on July 24, 2023, and proposed to adapt to the new situation of major changes in the supply and demand relationship of China's real estate market, adjust and optimize real estate policies in a timely manner, and make good use of the policy toolbox according to the city's policies, so as to better meet the needs of residents for rigid and improved housing, and promote the stable and healthy development of the real estate market. This is a major judgment based on the stage of China's economic and social development and the law of real estate development.
Recently, some indicators continue to show signs of marginal improvement, but it should also be noted that the market is still in the process of adjustment, and in the long run, this short-term adjustment is also conducive to the stable and healthy development of the real estate market. Liu Aihua, spokesman of the National Bureau of Statistics, chief economist and director of the Department of Comprehensive Statistics of the National Economy, said. The latest data shows that from January to November 2023, the sales area of commercial housing decreased by 8 percent year-on-year0%, of which, the area of residential sales decreased by 73%；Commercial housing sales fell by 52%, of which, residential sales fell 43%。
Wen Bin believes that in 2024, it is expected that the industry policy will focus on the core task of coordinating and resolving real estate risks, and implement comprehensive policies to stabilize the confidence of real estate enterprises and residents' expectations, meet the reasonable financing needs of real estate enterprises of different ownership systems without discrimination, accelerate the construction of affordable housing, the construction of public infrastructure for both ordinary and emergency purposes, and the "three major projects" of urban village transformation, and promote the formation of a virtuous circle between finance and real estate, so as to accelerate the construction of a new model of real estate development.
In terms of concept, we must always adhere to the positioning of 'houses are for living, not for speculation', focus on meeting the demand for rigid and improved housing, and strive to let the people live in good houses. Ni Hong said. The 2024 People's Bank of China Work Conference made it clear that next, the monitoring and analysis of the real estate market will be strengthened, and differentiated housing credit policies will be accurately implemented according to urban policies.
It is worth noting that at present, the construction of affordable housing, the construction of public infrastructure for both ordinary and emergency purposes, and the transformation of urban villages have been launched. "This is a major decision made by the world, and it is an important measure launched according to the new situation of the real estate market. Ni Hong said that among them, the requirements for planning and building affordable housing are that the city party committee and the first party committee should assume the main responsibility to solve the housing problems of the masses, especially the housing problems of new citizens and young people, so that they can let go of their hands and feet to strive for a better lifeThe focus of urban village transformation is to eliminate safety risks and hidden dangers, improve the living environment, promote industrial transformation and upgrading, and promote high-quality urban developmentThe construction of public infrastructure is a major measure to coordinate development and security and improve urban resilience.
In order to adapt to the new development model, Wen Bin believes that next, real estate enterprises should do a good job in "immediate matters" and "long-term matters", and transform from the traditional "three high" business model of high debt, high leverage and high turnover to a high-quality development model. "The industry predicament since the second half of 2021 began with the rupture of the capital chain of real estate enterprises, and some enterprises have problems such as debt default, unfinished buildings, and illegal misappropriation of pre-sale funds. ”
On the one hand, do a good job in the "immediate matter" and actively and steadily resolve the debt risk of real estate enterprises. Recently, China Orient Asset Management Co., Ltd., one of the five national financial asset management companies (AMC), held a seminar on risk mitigation of real estate corporate bonds. The relevant person in charge of China Oriental said that the next step will be to give full play to the counter-cyclical financial adjustment function and professional disposal ability, and early identification, early warning, early exposure and early disposal of risks.
On the other hand, do a good job in "long-term things", adhere to demand-oriented, and build the core competitiveness of real estate enterprises. Next, real estate enterprises can develop the construction of market-oriented rental housing development model, actively participate in the construction of affordable housing, comprehensively develop the service chain, and work hard in decoration, garden construction, property security, and convenient life, so as to continuously improve the service level and service quality of real estate enterprises. (Economic ** reporter Guo Ziyuan).