By｜Da He
Let’s briefly discuss today’s so-called super important policy of interest subsidies for resident home purchases.
The conditions are not complicated.
For newly issued commercial personal housing loans, first-time home purchase, area not exceeding 120 square meters, total price not exceeding 1.5 million yuan.
The principal of the loan eligible for interest subsidy is up to 1 million yuan, with an annualized subsidy of 1 percentage point, for a maximum of 5 years.
If you take full advantage of the policy for a 1 million yuan loan, you can save nearly 50,000 yuan in interest.
And if it’s the fastest, it will be implemented starting from October 1st this year, in a couple of days.
Many people’s first reaction is to calculate whether this 50,000 yuan is a Maserati coupon.
What I care more about are two other details.
First, for the same first-time home purchase of 1.5 million yuan, if you buy it with full payment, the government will not provide any subsidy;
but if you borrow money from the bank to buy it, as long as you meet the conditions, you can pay tens of thousands of yuan less in interest.
Second, people who have already bought homes and are paying off their loans also don’t qualify.
Even if you still owe the bank 1 million yuan now, as long as it is a pre-existing home loan issued previously, you still cannot enjoy it.
In summary, the government is not subsidizing housing prices this time, nor is it taking care of previous loans; the money is directly subsidizing the interest on newly issued home loans.
This is worth pondering.
A major background is that in recent years, many things related to real estate have already decreased significantly.
Down payment ratios have decreased, mortgage rates have decreased, purchase restrictions have been greatly relaxed, and provident fund loan amounts have been continuously adjusted.
In the early years, when looking at houses, many families would first ask the bank how much they could borrow.
If the bank said they could lend 2 million yuan, they would try to scrape together the down payment for a 2 million yuan loan; if they were still short of money, they would ask their parents for help. As long as the monthly payments were manageable, higher loan amounts were usually better.
Now, many people first leave themselves a way out.
How much money to keep at least, what is the maximum monthly payment, borrow for 20 years or 30 years, how many months can they last if their job changes, after calculating all this, even if the bank is willing to approve a few hundred thousand more, people may not want it.
Whether the bank is willing to lend is no longer as important as before.
It’s even to the point where even the government is starting to pay interest for some homebuyers.
And mortgages are not the first.
Personal consumption loans already have government interest subsidies, and credit card installments have also been included;
loans for service industry businesses, loans for small and medium-sized enterprises, and loans for equipment upgrades are all using similar methods.
In the past, the most common way to make loans cheaper was to lower interest rates.
Now there is an additional layer of government interest subsidy.
The bank collects money according to the contract, and the government pays the interest for the borrower for the portion that meets the conditions.
The advantage is that it can be very specific.
Not given for second homes.
Not given for exceeding 120 square meters.
Not given for housing prices exceeding 1.5 million yuan.
Not given for old mortgages.
Not given for using new loans to replace old ones.
There is also a rather detailed point that the total housing price is limited to within 1.5 million yuan.
Most houses in Beijing, Shanghai, Guangzhou, and Shenzhen are basically not considered, and it is also difficult to qualify in the core urban areas of some strong second-tier cities.
A large number of eligible housing units are still in third- and fourth-tier cities, county towns, the outskirts of second-tier cities, and some second-hand homes with lower total prices.
It is not difficult to find housing in these places now.
What is difficult is to get someone with a down payment, income, and loan approval to sign a purchase contract today.
After these thresholds are filtered, the remaining people are quite specific.
They can afford the down payment, their job and income can at least pass the bank’s review, they originally had a demand for buying a house, but they have been looking and comparing for the past few months, and have not signed the contract yet.
Those who cannot afford the down payment cannot use it.
Those with unstable income that the bank refuses to lend to cannot use it either.
Those who have decided not to buy a house in the next few years will probably not change their minds because of 50,000 yuan.
Those who might be pushed forward are those who have already looked at houses, were planning to buy sooner or later, but just wanted to wait a little longer.
After the policy has been in effect for a few months, the transaction data will tell us how many of these people actually enter the market.
In the past few years, people bought houses and always complained about high prices, high down payments, and high interest rates.
Now housing prices have dropped significantly, down payment ratios have decreased, mortgage rates have been going down, and the government is helping first-time homebuyers pay 1 percentage point of interest.
For families who were already planning to buy a house within 1.5 million yuan this year, this tens of thousands of yuan is naturally money saved.
But for someone who hasn’t even decided whether to buy or not, putting nearly 50,000 yuan into a 1.5 million yuan house doesn’t seem as significant as it appears in the title.
It’s only about 3% of the housing price.
If the housing price drops a few more percentage points, this subsidy will be gone.
After purchase, there are still renovation, property management, depreciation, and a debt that may last twenty or thirty years.
Saving a few hundred yuan in interest per month is certainly useful for families whose monthly payments are just at their limit.
But many people’s concerns are not about these few hundred yuan at all.
Whether the job will be stable next year, whether housing prices will continue to fall, how many young people will buy houses in this city in the future, whether houses will be easy to sell in a few years, picking any one of these is probably more important than a 1 percentage point interest rate.
The policy implementation period is tentatively set for one year.
If you buy this year and meet the conditions, you can enjoy the interest subsidy for up to 5 years.
If you continue to wait, whether it will be available next year is unknown.
Some people will buy their houses this year, which they originally planned to buy next year or even the year after, because of these tens of thousands of yuan.
There’s nothing wrong with that.
Policies are meant to have an effect.
After running for a while, it will also be a good time to see how much home buying demand today is just lacking this little bit of interest.
In recent years, we often hear the term ‘rigid demand’.
Hearing this term too often can easily confuse two things.
Many young people naturally hope to have their own house.
But when they actually go to the sales office, take out tens of thousands of yuan for the down payment, and sign a loan contract for twenty or thirty years, it’s another matter.
Only the latter will appear in the transaction data in the end.
In the past, these two things were very close.
After working for a few years, getting married, the next step was likely to buy a house.
Parents would help with the down payment, and they would borrow as much as possible from the bank. A price increase of tens of thousands of yuan half a year later was what everyone feared most.
Now, when looking at houses, many families first assess their jobs and income, then look at the city’s population, housing inventory, and the recent transaction prices of surrounding second-hand homes.
After all the calculations, they then consider whether the monthly payments can be reduced by a few hundred yuan.
For those who were already planning to buy this year, this interest subsidy is certainly a good thing.
Saving tens of thousands of yuan for free, there’s no reason to refuse.
But calling it a ‘big move’ for the property market is a bit of an exaggeration.
Housing prices have fallen, down payment ratios have decreased, mortgage rates have also decreased, and now the government is paying one percentage point of interest for you.
If, even at this point, many people still choose to wait, then what the property market is lacking is probably not that one percentage point of interest.
End of full text, thank you for reading. If you found it good, please like, share, and comment.
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Written at the end: I have created a ‘Planet’ community group, which has been operating for two years. Friends with similar values are welcome to join.
Every day, I share some of my observations and thoughts in the ‘Planet’ group, and you can also ask me questions, and we can progress together at a steady pace and enjoy the beauty of uniform progress~
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