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Recently, there have been more and more policies on "identifying first homes by district" in various places, which is related to the down payment ratio and mortgage interest rate of home buyers.

According to the official WeChat account of "Chengdu Housing and Urban-Rural Development", starting from August 13, 2024, for new housing purchases in Chengdu, only the housing situation of the buyer in the district (city) or county where the intended housing is located will be verified. If the buyer has no housing, it will be recognized as the first home.

Not only Chengdu, but also Suzhou, Hefei, Guangzhou, Jinan, Nanning, Hangzhou and many other cities also recognize first homes by district. At a time when the purchase restriction policy has been basically lifted, what direct impact will the recognition of first homes by district have on buyers' down payment ratios and mortgage interest rates? With the current down payment ratios and interest rate differences between first and second homes, to what extent can it stimulate consumer demand?

Chengdu recognizes first-time home buyers by district, saving RMB 60,000 on total interest on a million-dollar mortgage

According to the official WeChat account of Chengdu Housing and Construction, the Chengdu Housing and Construction Bureau issued a notice to further optimize the relevant policies on housing transactions. Among them, for new housing purchases within the city, only the housing situation of the buyer in the district (city) or county where the proposed housing is located will be checked. If the buyer has no housing, it will be recognized as the first house.

The first home is recognized by district, which means that as long as there is no house in this area, the down payment ratio and loan interest rate can implement the first home policy.

A local real estate agent in Chengdu told reporters that currently, the down payment ratio for the first home in Chengdu is 15%, and the interest rate is 3.25%; the down payment ratio for the second home is 25%, and the interest rate is 3.55%.

Taking a commercial loan of 1 million yuan with equal principal and interest for 30 years as an example, if it is a second home, the total interest is about 626,600 yuan, and the monthly payment is 4,518.4 yuan. If it is the first home, the total interest is 566,700 yuan, and the monthly payment is 4,352.06 yuan. In this way, if it is recognized as the first home, the total interest can be saved by about 60,000 yuan.

Zhang Bo, director of the 58 Anjuke Real Estate Research Institute, said that the city-wide housing inspection has been narrowed down to only county-level inspections, which has greatly expanded the coverage of first-home purchases for Chengdu homebuyers. The purchase demand that originally needed to be confirmed as a second home can be identified as a first home, and both the down payment ratio and the loan interest rate can enjoy a greater discount. At present, many homebuyers have diverse improvement needs, such as buying a retirement home for their parents, or purchasing a home for travel or vacation, etc. This policy itself is more conducive to meeting such needs.

In addition, the new policy of Chengdu also points out that if there are houses in the district (city) or county where the housing is to be purchased and they are listed for sale, the number of houses will be reduced accordingly. Commercial banks are supported to handle personal housing loan business according to the number of houses recognized by the customers.

Zhang Bo pointed out that deducting the houses currently listed for sale from the number of houses is a positive way to guarantee the improvement demand of "old for new". Since many improvement demands of "selling old" and "buying new" are carried out simultaneously, and many places even encourage buying new first and then selling old at the same time, the number of houses under the name of the prospective buyer will be affected before the old house is transferred. This policy deserves to be promoted in more cities.

Suzhou, Guangzhou, Hefei, Hangzhou and other cities have implemented policies to reduce the financial pressure on home buyers

Chengdu is not the first city to recognize first-time homebuyers by district. According to statistics from the Beijing News, many first- and second-tier cities, including Suzhou, Hefei, Guangzhou, Qingdao, Jinan, Nanning, and Hangzhou, have already recognized first-time homebuyers by district.

On May 28 this year, the General Office of the Guangzhou Municipal People's Government issued a notice on further promoting the stable and healthy development of the real estate market. It pointed out that if a resident family does not have a house in the district where the house is purchased and meets the conditions for purchasing a house, the new housing loan can be recognized as the first house; if the "rent one and buy one" or "sell one and buy one" conditions are met in the district where the house is purchased, the housing loan policy for the new house can be recognized according to the number of houses under the name after verification and reduction.

At present, the interest rates for first-home mortgages in Guangzhou are 3%, 3.05%, 3.1%, and 3.3%, and the second-home mortgage rate is mostly 3.7%. If the first home is identified by district and the loan policy is implemented according to the first home, the interest cost will be significantly saved.

Suzhou's "June 26 New Policy" points out that if the buyer does not have a house within the urban area of ​​the purchased house, or has only one house within the urban area of ​​the purchased house and it is listed for sale, the newly purchased house can be recognized as the first home when applying for a mortgage loan.

A staff member of Suzhou Construction Bank said that currently Suzhou purchases houses on a district basis. As long as you don’t own a house in this district, it will be considered as your first home. If you have a mortgaged house in other areas, as long as your income can cover the debt twice, the interest rate can be as high as 2.95%.

In Jinan, for houses signed online after July 16 (inclusive), not only will commercial personal housing loans be recognized as the first home by district, but provident fund loan policies will also be adjusted synchronously.

Although mortgage rates continue to decline, there is still a clear gap between first and second homes. According to the monitoring data of mortgage rates in 45 major cities across the country by Rong360 Digital Technology Research Institute, in July, the average interest rate for first home loans was 3.29%, and the average interest rate for second home loans was 3.71%, a difference of 42 basis points.

Ai Yawen, an analyst at Rong360 Digital Technology Research Institute, told reporters that the policy of identifying first-home buyers by district has lowered the threshold for home purchases on the one hand, and alleviated the financial pressure on buyers on the other hand, helping to stimulate potential housing demand, especially cross-district purchases and improvement demand, which can stimulate the real estate market to a great extent, but the ultimate effect also depends on multiple other factors, including the economic environment, income level, employment status and consumer confidence.

Beijing News reporter Duan Wenping

Edited by Yang Juanjuan and proofread by Liu Baoqing