Real Estate Blue Book: Second-home loan interest rates will remain stable and regulatory policies will diverge.

Recently, the Institute of Urban Development and Environment of the Chinese Academy of Social Sciences and the Social Science Literature Press*** jointly released the "Real Estate Blue Book: China Real Estate Development Report (2019)" (hereinafter referred to as the "Real Estate Blue Book") . The Real Estate Blue Book points out that the continuously increasing level of urbanization is still the fundamental driving force for the development of China's real estate market, highlighted by the housing demand generated by population growth and migration, improvement of living conditions, and urban renewal. In 2019, China's urbanization rate is expected to increase by more than 1 percentage point compared with last year, and there is still considerable room for development in the real estate market.

The "National New Urbanization Plan (2014-2020)" clearly states that by 2020, the level and quality of urbanization will steadily improve, and the urbanization rate of the permanent population will reach about 60%, and the urbanization rate of the registered population will Reach about 45%, narrow the gap between the urbanization rate of the registered population and the urbanization rate of the permanent population by about 2 percentage points, and strive to achieve about 100 million agricultural migrant workers and other permanent residents to settle in cities and towns. In 2018, the total population of mainland China was 1,395.38 million, of which the urban permanent population was 831.37 million, an increase of 17.9 million from the end of 2017; the urban population accounted for 59.58% of the total population (urbanization rate), an increase of 1.06 percentage points from the end of 2017. The urbanization rate of the registered population was 43.37%, an increase of 1.02 percentage points from the end of the previous year. This trend will continue.

However, neither the policy environment nor the laws of development no longer support the boom in real estate. The main discussion on monetary policy in the 2019 Government Work Report is: a prudent monetary policy must be appropriately tight, and the growth rate of broad money M2 and social financing must match the nominal growth rate of GDP, so as to better meet the needs of economic operation to remain at a stable level. The need for reasonable intervals. In actual implementation, we must not only keep the money supply gate open and avoid "flooding", but also flexibly use a variety of monetary policy tools to unblock monetary policy transmission channels, maintain reasonable and sufficient liquidity, and effectively ease the real economy, especially the Financing is difficult and expensive for private and small and micro enterprises, and financial risks must be prevented and resolved. Deepen the market-oriented reform of interest rates and reduce the actual interest rate level.

Based on this, the Real Estate Blue Book believes that the current overall tone of prudent monetary policy and moderate tightening has been basically determined. In the future, under the framework of prudent monetary policy, the central bank will be able to effectively "drip-feed" the economy from multiple dimensions such as flow, direction and maturity, further improve the transmission efficiency of combined policy tools to the market, and prevent "flooding". Although there is still the possibility of further reductions in the deposit reserve ratio in 2019, the magnitude and frequency will be smaller than in 2018. On the one hand, this is because there is still downward pressure on the economy and financial support needs to be increased. Especially when there are bottlenecks in non-credit financing, it is more likely that credit will be appropriately accelerated. On the other hand, the economy needs to reduce deposit reserves. gold rate to moderately increase market liquidity. However, in order to avoid "flooding", once market liquidity basically reaches reasonable and sufficient conditions, it is impossible to continue to reduce the deposit reserve ratio significantly.

With credit growth gradually rising, fiscal expenditure growth rebounding, and foreign exchange holdings declining slightly, the central bank's targeted regulatory policies will continue to focus on strengthening credit to support the real economy, and monetary policy will continue to be prudent. tone and maintain macro liquidity at a reasonably sufficient state. The growth rate of M2 is expected to gradually pick up in 2019. The goal of structural deleveraging is to significantly reduce the leverage ratio of enterprises and stabilize the leverage ratio of households. The performance of the current market credit level is also generally consistent with this goal. On the residential side, the year-on-year growth rate of medium and long-term loans has generally stabilized. The proportion of mortgage loans has dropped to 25.13% month by month since the end of 2018, and it is predicted that it will still fluctuate slightly at a low level in the later period. On the corporate side, the financing environment for real estate companies has significantly "picked up", especially the steady increase in domestic bond issuance, and there is also a slight downward trend in financing costs.

The Real Estate Blue Book believes that the space for further easing of monetary policy in 2019 will gradually shrink, and the stimulus effect on the property market will be relatively limited. In addition, the regulatory thinking of "housing is for living, not for speculation, and policies will be implemented according to the city" has not changed. It is expected that In 2019, sales in the real estate market will decline, investment growth will slow down, and the trend of steady adjustment in the industry will not change substantially.

Excessive pessimism is not necessary. Mortgage risks cannot yet threaten the foundation of banks. The Real Estate Blue Book stated that personal housing loans are an important means of regulating the real estate market, and their trends are generally consistent with the internal logic of the real estate market trends. In terms of quantity, the growth rate of the balance of personal housing loans has remained stable or slightly declined. On the one hand, this is the result of the continuation of policy controls. On the other hand, the existing leverage level does not support the increase, and the annual growth rate is expected to not exceed 20%.

In terms of prices, second-home loan interest rates will remain stable or fall slightly at most. This is because the positioning of "housing is not for speculation" has not substantially changed. Therefore, suppressing investment speculation demand is still a policy focus; first-home mortgages Interest rates will fall significantly, which will highlight the residential nature of housing and also correct the "accidental damage" of past regulations; overall, driven by the decline in first-home loan interest rates, the entire mortgage market interest rates will decline slightly.

In terms of risk, although indicators such as loan-to-income ratio, debt service ratio and loan-to-value ratio are all rising, there is no problem with the sustainability of debt. This is due to the low leverage ratio in the past and the low leverage ratio in the past. On the one hand, due to the large increase in housing prices, the room for affordable decline is larger. The Real Estate Blue Book predicts that as long as regulatory policies maintain a certain degree of continuity, the future increase in debt will be smaller than the increase in housing prices, and housing loan risks will not have a significant impact on banks in the short term.

As for the orientation of real estate regulation policies, the Real Estate Blue Book summarizes it in three words: maintaining stability, differentiation and decentralization. Maintaining the healthy and stable development of the real estate market in 2019 is the top priority. Continue to maintain the continuity and stability of regulatory policies, strengthen two-way mediation of supply and demand in the real estate market, improve the housing supply structure, support reasonable owner-occupied demand, and ensure market stability.

Real estate control policies will diverge. After so many years of development in the real estate market, there is an obvious trend of differentiation between different cities. The central government proposes city-specific policies, which actually mean that different cities adopt different policies, which means that differentiation at the policy level is also a general trend. For those hotspot cities with greater pressure, we will continue to maintain strict control policies and not relax them. While preventing real estate price bubbles, we will focus on supply-side structural reforms. For third- and fourth-tier cities, we will mainly maintain the stability of the real estate market and prevent Market prices fell too fast.

In December 2018, the Central Economic Work Conference positioned the real estate market in 66 words: "We must build a long-term mechanism for the healthy development of the real estate market and adhere to the positioning that houses are for living in, not for speculation. , implement city-specific policies and classified guidance, consolidate the main responsibilities of urban governments, and improve the housing market system and housing security system. "This means that local governments have further expanded their independent power to regulate the real estate market. If "policy for each city" means that the central government sets the tone, then the local government's "one policy for one city" in the process of real estate regulation reflects the flexibility of the policy. Emphasize "one city, one policy" and pay more attention to the expansion of the main responsibilities and autonomy of local governments in real estate regulation. Since the real estate market transaction trends, inventory conditions, and housing prices in different cities are different, city governments formulate policies based on actual conditions and assume the main responsibility for regulation.