First-tier cities tighten the property market "money roots"
China News Weekly reporter/Chen Weishan
Issued in the 987th issue of China News Weekly on March 15, 2020
"Many people buy houses not for living, but for investment or speculation. This is very dangerous, because holding so many properties, if the market goes down in the future, personal property will suffer a lot of losses, and the loan will not be repaid. , The bank can't collect the loan principal and interest, and economic life will be greatly chaotic.” On March 2, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said that the tendency of real estate financialization and bubbles is still relatively strong.
This statement comes at a time when real estate control policies are frequently released in various places. Zhang Dawei, chief analyst of Centaline Property, has calculated that as of early March, real estate control policies have been issued 97 times during the year.
Behind this is the significant increase in housing prices, especially in first-tier cities, second-hand housing prices, and second-hand housing prices are often regarded as a barometer of the property market.
In January this year, the National Bureau of Statistics announced the changes in the sales prices of commercial housing in 70 large and medium-sized cities. Shenzhen, Guangzhou, and Shanghai ranked the top three month-on-month increase in second-hand housing prices, and Beijing ranked eighth.
At the end of last year, the second-hand housing market in first-tier cities has heated up.
"Recently hot second-tier cities housing prices have also risen significantly." Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, told China News Weekly that the situation of this round of housing price increases is quite similar to that of 2015. "Shenzhen's property market took the lead in heating up in the second half of 2015. At the end of the year, it was Shanghai’s turn. In 2016, it spread to Beijing and Guangzhou, and spread to hot second-tier cities in the second half of that year. Both times, under the background of loose monetary conditions, the housing market spread from Shenzhen to other cities."
Many of the regulatory policies introduced in the first-tier cities point to tightening the "finance", especially in Shenzhen.
In 2020, second-hand housing prices in Shenzhen will increase by 12.9%.
First-tier cities tighten mortgages
In the past month since the Shenzhen Municipal Bureau of Housing and Urban-rural Development released the reference price of second-hand housing transactions, on intermediary platforms such as Lianjia and Anjuke, the unit prices of the houses for sale were all adjusted to the official reference prices. price.
On February 8, the Shenzhen Municipal Bureau of Housing and Urban-Rural Development released the reference prices of 3,595 residential communities in the city. The pricing is based on the price of second-hand housing online and with reference to the surrounding first-hand housing prices.
The Shenzhen Real Estate Intermediary Association (hereinafter referred to as the "Shenzhen Real Estate Association") reminds that all real estate intermediaries and intermediary personnel should use the reference price as an important basis and make reasonable announcements when publishing listing advertisements online and offline.
In late February, the Shenzhen Municipal Bureau of Housing and Urban-Rural Development even launched a special inspection with two contents: first, whether the listing price issued by real estate brokerage agencies in stores, websites and related online platforms exceeds the reference price; second, brokers use WeChat, QQ, etc. Whether the published price exceeds the reference price.
Rigidly restricting the listing price of second-hand housing with the official reference price is rare in the regulation and control policy.
Li Yujia believes that the regulation and control of new houses includes land sales price limit, pre-sale pricing, batch sales control, and developers’ "window guidance", but the second-hand housing market has no control, and the transaction volume and price are controlled by tens of thousands of traders. Driven, the government does not even grasp the most basic prices.
He told China News Weekly that if you do not control the price of second-hand housing, it will be difficult to control the price of new housing.
"The former forced the latter to rise, and in turn, the rise in the price of new houses once again pushed up the price of second-hand houses, forming a cycle.
According to data released by the Shenzhen Real Estate Association, the number of second-hand housing online signings in Shenzhen fell precipitously after the release of the reference price. Taking the last week of February as an example, the number of weekly online signings was 834, while the number of weekly online signings before the release of the reference price About 2500 sets, a decline of about 70%.
But can the reference price really limit the real transaction price?
In an interview, Wang Feng, director of the Shenzhen Real Estate and Urban Construction Development Research Center, a reference price "pricing" agency, said that 62% of the reference price of real estate is basically the same as the transaction price.
"China News Weekly" randomly selected multiple residential communities in Shenzhen and found that it is not uncommon for the reference price to deviate from the previous transaction price. For example, the reference price of Baozhu Garden and Nanguo Belvedere in Nanshan District, Shenzhen are 69,000 respectively. Yuan/square meter and 71,400 yuan/square meter, but the previous transaction unit prices were both in the range of 95,000 yuan to 100,000 yuan.
"China News Weekly" learned from multiple real estate brokerage agencies in Shenzhen that the listing price is published strictly in accordance with the reference price, but the real transaction price is not affected.
"Even if the contract price is higher than the reference price, it will not affect the transfer." A real estate agent told reporters, "What is really affected is the loan line, and the bank has already issued loans at the reference price."
In late February, a number of banks including China Everbright Bank, China Construction Bank, and Agricultural Bank have made clear that they will use the reference price as a reference and important basis for bank mortgage loans.
It is understood that in addition to signing the "Real Estate Sales Contract", the buyers and sellers of second-hand houses in Shenzhen will also sign a "Supplementary Agreement" which stipulates the settlement method after the breach of contract due to the inability to obtain a full loan due to the reference price restriction.
Li Yujia believes that banks lending based on reference prices are more uncomfortable for leveraged home buyers.
The price of a real estate suddenly rises by 500,000 yuan. If the down payment is increased by 500,000 yuan, this is not a small amount for most people.
But if you only need an extra loan of 500,000 yuan, the corresponding monthly payment is only 2,000 yuan.
This is the main reason why housing prices in Shenzhen can rise arbitrarily in the past.
Increase the leverage to the greatest extent, dilute the pressure on monthly payments, and cover them all at once through rising housing prices.
The first-tier cities that are tightening mortgages are not just Shenzhen, but Guangzhou is also typical.
In mid-January, the Guangzhou branch of the People’s Bank of China issued window guidance to local banks in Guangzhou, requiring that the proportion of new personal housing loans should not exceed 12.6%, and that the amount of new personal housing loans each month should not exceed October, November, and December 2020. Three-month average loan amount.
This was called "two red lines" by Zheng Dayuan, general manager of Guangzhou Dayuan Mortgage Agency Service Co., Ltd., and he told China News Weekly, "Generally speaking, the mortgage loans issued by banks in the fourth quarter are relatively small, and many banks are trying to win." "Opening the door" will increase the loan limit in January. However, in January this year, due to the implementation of the centralized management system for real estate loans, that is, the implementation of the'five-tier classification', many banks have tightened their loan quotas in early January, and the'two red lines' have worsened the situation. Now bank mortgages are common. Nervous, some of the backlog of loan applications last year have not yet been disbursed."
“Some banks’ mortgage lending is purely “reliant on the sky”. For example, there is a need for prepayment of existing mortgages in order to release some quotas. Currently, new mortgage loan applications are no longer accepted." Zheng Dayuan told reporters that most banks still accept mortgage loan applications. , But the loan time is difficult to guarantee.
"The bank will require applicants to sign a statement to the effect that the bank's tight quota makes it difficult to guarantee the loan time. Previously, if the conditions were met, the loan could be released within a week. Now the fastest loan time is two months. "
Although the mortgage loan applications and loans in Beijing and Shanghai have not changed significantly, the authorities in Beijing and Shanghai have issued notices to prevent consumer loans and business loans from illegally flowing into the real estate market, which is also a signal of tightening on the capital side.
“Even some non-first-tier cities, such as Foshan, are also tightening mortgages, but they are not as concerned as the first-tier cities, because the reasons for this round of housing price increases largely point to the relatively loose funding last year.” Li Yujia said.
Is it difficult to reproduce the property market's loose funds?
In 2020, lower housing loan interest rates in first-tier cities and lower operating loan interest rates will facilitate the inflow of funds into the housing market in first-tier cities. This situation is currently being reversed.
After the quota is tightened, the mortgage loan interest rate will definitely rise. This is the consensus of the interviewees. The mortgage interest rate in Guangzhou has been the first to increase in the first-tier cities.
"Guangzhou mortgage interest rates began to decline in the second half of 2020, and this year the mortgage interest rates of various banks have gradually increased." Zheng Dayuan told China News Weekly that last year, when the first home loan interest rate of local banks in Guangzhou was the lowest, it was as low as the LPR basis, that is, 4.65. %, while the mainstream first home loan interest rate is increased by 30 to 40 basis points, this year it will increase by 55 basis points to reach 5.2%, and the second home interest rate basically increases by 75 to 80 basis points, reaching 5.4% to 5.45%, compared with last year A lot higher.
"
"In the eyes of banks, mortgages are high-quality loans, and the non-performing rate is only half of that of physical loans. Housing prices in the first-tier property market are high, but for banks, this is the safest area. Therefore, the competition for mortgages in first-tier cities is very fierce. Sacrificing profits has resulted in lower mortgage interest rates in first-tier cities." Li Yujia told China News Weekly.
Some people in the banking industry mentioned that the mortgage interest rate of banks in first-tier cities was even lower than that of LPR last year.
Taking December 2020 as an example, the first home loan interest rate in the four first-tier cities is lower than the national average of 5.23%, of which Shenzhen is 4.98%.
Li Yujia bluntly said that the problem of Shenzhen's property market is the problem of money supply and leverage.
"Why the Shenzhen real estate market has been so hot in the past year? Part of the reason is that there were loopholes in Shenzhen's previous purchase restriction policies. For example, after a foreigner married a Shenzhen citizen, he could apply for a loan and buy a house separately. If a'marriage ticket' appeared in Shenzhen, that means finding a Shenzhen citizen to get married. Divorce after buying a house.” Zheng Dayuan believes that another important reason is that Shenzhen’s previous financial policies were relatively loose, and its requirements for mortgage loan applicants’ repayment capabilities, such as bank flow and assets, were relatively low.
In late January, Ni Hong, the vice minister of the Ministry of Housing and Urban-Rural Development, led a team to Shenzhen and other places to investigate and supervise the real estate market.
Subsequently, for the first time, Shenzhen required real estate companies and real estate brokerage agencies to work with commercial banks to verify the buyer’s income certificate, credit report, source of purchase payment, and bank statements for the past one year or more.
"Under the situation that housing prices in Shenzhen are already high, there are very few real buyers who buy a house with full payment. Lowering the leverage ratio through the reference price can be said to be a salary draw." Zheng Dayuan said that some so-called "full payment for a house" is not in the true sense. "Full amount", but did not use mortgage loans, "Many people borrow funds from relatives and friends, including using bridge funds, and then mortgage them to obtain loans from the bank after buying a house, using the lower interest rates of mortgage loans."
If the mortgage interest rate in the first-tier cities last year was a "depression", the other "depression" is the operating loan for small and micro enterprises, and the interest rate can be as low as 4%.
The path for business loans to enter the property market is generally to buy a house in full by home buyers, then mortgage the property through a shell company, arbitrage the loan, and return the bridge funds used when buying the house in full.
For example, in the inspection of preventing business loans from entering the property market launched by Beijing at the end of January, it is mainly aimed at the recent application of business loans by home buyers and their immediate family members who purchase houses in full.
In fact, cyclical tightening of monetary policy is not uncommon in the past regulatory policies.
"But in the past, after the cyclical'financing gates' were closed, the expectations of all walks of life would definitely be relaxed in the future, but after the implementation of the'five-tier classification', real estate loans will not experience cyclical fluctuations." Li Yujia said.
The "five-tier classification" refers to the division of banks into five tiers, which control the proportion of real estate loans and the proportion of personal housing loans. This real estate loan concentration management system has been implemented this year.
Chen Xiao, an analyst at the Zhuge Housing Data Research Center, told China News Weekly that overall, for most banks, the pressure to meet the standards is not great, and most banks have not reached the upper limit.
Some regions have raised the upper limit of the concentration of certain types of loans. For example, provinces such as Guangzhou and Hainan have raised the upper limit of the proportion of housing loans to small banks and rural cooperative institutions to varying degrees.
However, on the whole, the rising ratio is not large, and the scale of these small banks' businesses is limited, which does not mean the relaxation of the regulation of housing loans. It is mainly due to moderate flexibility in accordance with local actual conditions.
“It’s actually clear at a glance which banks can increase real estate loans. If banks “step on the line” and do not recover the original real estate loans and reduce the numerator, they must increase the denominator, that is, increase real economy loans, so that there is room for new real estate loans to be released. "Li Yujia believes that the first and second tier banks actually have a relatively large scale of real estate loans, and they have fully enjoyed the dividends of rising real estate. The effect of financial accelerators will drive more leveraged investment, which is ultimately reflected in the growth of bank profits.
However, for the third and fourth tier banks, mainly local small banks, they serve more county economic development. Real estate loans are helpful to their business development and quality improvement, as well as regional development. This can explain why some regions have increased their prices. The upper limit of the loan concentration of the third and fourth tier banks.
"The concept of'purchasing restrictions' appeared in 2010. Since then, the regulatory policies have mainly focused on housing purchase qualifications and loan qualifications, and the regulatory effects have been gradually digested. Now the direction of regulation has been gradually adjusted. Under the situation of high housing prices, bank loans are indispensable for housing purchases. , The regulatory policy is gradually shifting to control bank loans." Insiders sighed with emotion.
China News Weekly, Issue 9 of 2021
Statement: The publication of the "China News Weekly" manuscript is authorized in writing