Hong Kong Stock Concept Tracking | Existing Home Loan "Rate Cut" Imminent Real Estate Sector Accelerates Stabilization and Valuation Repair (Concept Stocks Attached)

The State Council Information Office held a press conference, and the central bank announced that it will reduce the interest rates on existing housing loans and unify the minimum down payment ratio for housing loans.

Specifically, it will guide commercial banks to reduce the interest rates on existing housing loans to levels similar to those of new housing loans, with an average expected reduction of about 0.5 percentage points; the minimum down payment ratio for the second housing loan nationwide will be reduced from 25% to 15%, unifying the minimum down payment ratio for first and second housing loans.

After contacting several state-owned and joint-stock banks, reporters received responses indicating that most banks have not yet formulated detailed rules for reducing the interest rates on existing housing loans. The specific plan is still under study and will be uniformly adjusted when finalized. "In addition to waiting for the head office's instructions, we also need to consider local policies to maintain consistency," a staff member of a joint-stock bank told reporters.

Industry insiders predict that the specific plan for reducing the interest rates on existing housing loans is unlikely to be announced before the "National Day" holiday.

According to the Zhixin Research Institute, on September 24, the State Council Information Office held a press conference. Overall, this time the central bank released several significant positive measures, which will have a positive impact on the macroeconomy and the real estate market. Lowering the reserve requirement ratio and interest rates will boost the economy by releasing liquidity and reducing the cost of funds. The expected economic improvement is likely to restore residents' income expectations. Lowering the interest rates on existing housing loans will further stabilize homebuyers' expectations for homeownership, restore market confidence, and lower the 7-day reverse repurchase rate will further guide the downward trend of the 5-year LPR starting from October, continuing to reduce the cost of home purchases. Lowering the minimum down payment ratio for the second housing loan will significantly reduce the threshold for residents to buy homes. With multiple measures working together, it is expected to stabilize housing prices and accelerate the bottoming out of the real estate market.

Morgan Stanley pointed out that the central bank's announcement of multiple monetary policies to support the real estate market slightly exceeded market expectations. They believe that these measures may boost fourth-quarter home sales and destocking, or help alleviate the downward trend in housing prices. The central bank estimates that reducing the interest rates on existing housing loans will help 50 million households save RMB 150 billion in interest payments annually. Morgan Stanley expects this to benefit shopping mall operators, including China Resources Mixc, China Resources Land, Longfor, and New World Development, based on the easing trend of retail sales decline.

Real estate-related industry chain companies:

China Overseas Development (00688), Country Garden Holdings (01908), Yuexiu Property (00123), Greenland Holdings (03900), Sunac China Holdings (01918), Longfor Group (00960), Greentown China (03377), Vanke (02202), China Resources Land (01109), and Agile Group (00884), among others;

Property management companies: China Resources Mixc (01209), Poly Property Services (06049), China Overseas Property (02669), Midea Real Estate (03990), among others.

Real estate agencies: Beike-W (02423), Country Garden Services (06098)