In the past two days the weather has warmed up and temperatures have continued to rise, yet the vibrant spring has not awakened the slumbering property market. According to statistics from the Market Research Institute of Vanke Woye I Love My Home Group, in early February, a total of 4,402 second-hand residential units in Beijing were registered online. Although this was an increase of 7.5% compared with the online registration volume in early January this year, it remained sluggish compared with the rapid recovery of Beijing's second-hand housing market after the Spring Festival in February last year. After the Spring Festival, the heat in Beijing's second-hand residential market dropped sharply. The average online registration volume in the eight days after the holiday (including one rest day) was only 550 units per day, down 28.6% year on year from the average daily online registration volume after last year's Spring Festival.

On the banking side, signals of mortgage tightening have also begun to appear. A Lianjia real estate agent told a Securities Daily reporter that a home-swap project he was handling had encountered some minor problems, the reason being that the approval cycle of the lending bank had been extended, causing the property transfer to be delayed, and the waiting period in between is very prone to variables.

The pace of mortgage growth will be appropriately slowed

The latest February financial data show that residential mortgage loans in February were 380.4 billion yuan, down 248.9 billion yuan from 629.3 billion yuan in January, but up 198.4 billion yuan from 182 billion yuan in the same period last year.

People's Bank of China Governor Zhou Xiaochuan said recently at the National People's Congress that the fastest growth in real estate loans last year was mainly in personal home purchase loans. This helps residents buy homes and helps destock third- and fourth-tier cities, but it easily pushes up home prices in first- and second-tier cities. This year mortgages will still grow at a relatively fast pace, but indeed need to be appropriately balanced, and are estimated to slow appropriately as policies are adjusted.

In fact, since February this year, in many places including Beijing, Shanghai, Guangzhou and Shenzhen, a number of banks have successively raised the minimum interest rate discount for first homes to 10%. According to Rong360 data, most banks, including Agricultural Bank of China, China Everbright Bank, China Merchants Bank and China Minsheng Bank, offer a minimum first-home mortgage rate discount of 10%, and only premium clients of Ping An Bank and Bank of Nanjing can still enjoy a 15% discount.

Data show that among 533 banks nationwide in February, 99 offered discounted rates below 10%, 29 fewer than in January, accounting for 18.57%. Among them, 89 banks offered a 15% discount, 5 banks offered an 18% discount, 2 banks offered a 13% discount, and 3 banks offered a 12% discount.

A reporter consulted a number of banks and found that mortgage rates in the capital mostly remained stable at a 10% discount, and account managers all told this newspaper that they had not yet received notice to continue raising rates. For the vast number of homebuyers, the 10% discount on first-home mortgage rates may continue for some time.

In addition, the lengthening of the mortgage approval cycle is also an important signal of mortgage tightening. A real estate agent at I Love My Home told this newspaper that generally speaking, the fourth quarter of each year is a month in which it is relatively difficult for banks to disburse loans, and banks will extend the approval cycle to slow disbursement. This is mainly because bank loan quotas are relatively tight in the fourth quarter. It is relatively rare for the approval cycle to be extended in the first quarter; generally it is a signal that banks are tightening mortgages.

A Lianjia real estate agent expressed the same view to the reporter. He disclosed that he was currently looking for a suitable property for a couple, and they were quite satisfied with one home and had reached the stage of negotiating the price with the owner. The couple needed first to receive the proceeds from selling their home in Tianjin in order to put together the down payment, so the owner needed to cooperate and wait for a period of time. However, the buyer of the Tianjin home had not yet received notice that the bank had approved the loan within the expected time, which also introduced some variables into the Beijing home purchase.

A China Everbright Bank account manager said that mortgage approval previously took about 10 working days, and the approval cycle has indeed been extended somewhat, but generally will not exceed 20 working days. Most other banks will also adjust approval times according to actual conditions.

Banks requiring a 30% down payment account for more than half

Rong360 monitoring data show that among 533 banks nationwide, 328 banks explicitly require a down payment of 40% or less for second homes, one fewer than last month, accounting for 61.53%. This month, 164 banks required a 30% down payment for second homes, 11 fewer than last month, accounting for 30.76%. The numbers of banks requiring 50%, 60%, 70% and 80% down payments were 97, 14, 51 and 34, respectively.

As of February 25, among 533 banks nationwide, 166 required a 20% down payment, 15 fewer than last month, accounting for 31.14%; 2 banks required 25%; 328 banks required 30%, accounting for 61.54%; 28 banks required 35%; and 9 banks suspended mortgage lending.

Rong360 analysis believes that the current trend of tightening national mortgage policy is obvious, and many banks have raised down payments to 30%. In the short term, pressure on homebuyers has increased somewhat, but it is believed that the market will become increasingly stable in the future, and more genuine first-time buyers will truly enjoy the benefits brought by regulation.

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