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On August 2, the Shanghai headquarters of the People's Bank of China held a work meeting for the second half of 2024 to summarize the work in the first half of the year and deploy tasks for the next stage.

In terms of maintaining the safe and stable operation of the real estate market, the Shanghai headquarters of the central bank cooperated with the Shanghai Municipal Government to introduce new real estate policies, lowered the down payment ratio and loan interest rate of individual housing loans; promoted the implementation of the 16 policies of financial support for real estate; promoted commercial banks to play the role of operating property loans to help high-quality real estate companies to revitalize their existing assets; made good use of the policy funds of the People's Bank of China's mortgage supplementary loan (PSL) to support the construction of the "three major projects"; and continued to provide good financial services for guaranteed delivery of buildings. Increase financial support for housing rental.

Zhang Bo, director of the 58 Anjuke Research Institute, told the First Financial reporter that the work meeting of the central bank's Shanghai headquarters focused on cooperating with Shanghai's new policies on the financial side and increasing financial support for the incremental market and the rental market. It covers reducing housing purchase costs, strengthening financial support, ensuring housing delivery and promoting housing rental. These policies will work together in the real estate market, ensure a more stable operation of the Shanghai real estate market, play a leading demonstration role, and better drive the orderly recovery of more cities.

After the national video conference on ensuring the delivery of housing was held on May 17 this year, Shanghai responded quickly and released multiple favorable policies on May 27 to optimize the housing market policy in all aspects. The financial support includes down payment ratio and mortgage interest rate.

From the perspective of down payment ratio, the down payment ratio for the first set was 30% before, and the down payment ratio for the second set was subject to differentiated policies, which was 40% in Qingpu, Jiading and other areas, and 50% in the main urban area. After the "527" new policy, the down payment ratio for the first set was reduced to 20%; the down payment ratio for the second set was still subject to differentiated policies, which was reduced to 30% in the Lingang New Area of ​​the Free Trade Zone and the six administrative districts of Jiading, Qingpu, Songjiang, Fengxian, Baoshan and Jinshan; and 35% in the main urban area.

In terms of mortgage interest rates, the "527" new policy stipulates that the commercial loan interest rate for the first home is adjusted to LPR minus 45 basis points, that is, the lowest mortgage interest rate for more than 5 years is 3.5%; the second home is LPR minus 5 basis points, the lowest is 3.9%, and the six administrative districts including Jiading and Qingpu are 3.7%.

Driven by the above-mentioned policies of simultaneously lowering the threshold and cost of purchasing a house, as well as the relaxation of home purchase qualifications, the Shanghai real estate market has been effectively repaired.

Data from the Shanghai Real Estate Trading Center showed that the Shanghai property market was not "off-season" in July, with new and second-hand housing transactions estimated to total 2.1 million square meters, a year-on-year increase of 12%. The total monthly transaction volume has maintained positive growth for three consecutive months since May.

In the second-hand housing market, the performance in June and July after the implementation of the "Nine Measures of Shanghai" was outstanding, changing the downward trend of the market after the "small spring" in March and April. Since March this year, the number of transactions in a single month has exceeded the prosperity line of 15,000 units for five consecutive months.

Among them, 23,700 units were sold in June, the highest monthly transaction since July 2021, an increase of 95% year-on-year; 18,000 units were sold in July, an increase of 45% year-on-year, basically the same as the "small spring" in March, and the transaction area was 50,000 square meters higher than in March.

The average monthly transaction volume of second-hand housing in June and July was about 21,000 units, which was at a relatively high level overall. From January to July, the transaction volume of second-hand housing was 9.52 million square meters, an increase of 10% year-on-year, and the growth rate was 5 percentage points higher than that from January to June this year.

New homes also performed well, with increased subscriptions and faster sales. In June and July, the average transaction area of ​​new homes was 690,000 square meters, an increase of 41% over the monthly average from January to May this year.

In the past June and July, a total of 54 projects in Shanghai completed subscriptions, a 35% increase over the first five months of this year; the average sales rate on the opening day exceeded 50%, higher than 40% in January-May this year. In terms of follow-up projects, in June and July, the number of visits to new housing projects increased, and the sales of follow-up projects accelerated significantly, with the average daily transaction area increasing by about 60% over January-May.

Song Hongwei, research director of Tongce Research Institute, said that for the Shanghai property market, there are three main types of policies that have a greater impact. The first type is the home purchase qualification policy related to "housing tickets". The second type is financial policies, including down payment ratios, mortgage loan interest rates, etc. The third type is taxes, transaction costs, etc. If the down payment ratios or mortgage loan interest rates can be further reduced in the future, it will help the continued stability of the Shanghai property market.

Regarding the work in the second half of this year, the Shanghai Branch of the People's Bank of China stated that it is necessary to effectively prevent and resolve financial risks, including strengthening the monitoring and analysis of the real estate market operation and financial situation.

Yan Yuejin, research director of E-House Research Institute, said that the requirements for real estate work in the second half of the year clearly strengthen the monitoring and analysis of real estate market operation and financial situation. This shows that in order to prevent and resolve financial risks, real estate work is still very important, and it is necessary to closely monitor real estate risks. At the same time, monitoring of real estate market transaction data is still critical.

Zhang Bo predicts that Shanghai will strictly follow the relevant policies of the 16 financial policies in the next step, effectively reduce the down payment ratio and loan interest rate of personal housing loans, and maintain the continuous and stable effectiveness of this policy in the market. Financial support for the housing rental market will help build a housing system that combines renting and purchasing and meet diversified housing needs.