Local Officials Want A Third Bailout as Mortgage Easing Impact Muted

The Chinese media dub the lifting of buying restrictions as the first market rescue. The second rescue was the new mortgage policies. Now local officials are begging for a third bailout in Beijing.

In the days before and after the National holiday, many local government officials traveled to Beijing and met with government officials, including the Ministry of Housing, as well as holding small meetings with central bank officials. They are asking for more policy easing. Local officials are saying that banks are constrained and the mortgage easing isn't hitting the ground in smaller cities. First tier cities aren't much better; in Shanghai the discount off prime offered by banks is 5%, nowhere near the 39% allowed by the new policy. In Shenzhen, a bank manager quoted in the article below said bank financing costs are high, making discounts difficult.

A source close to officals in the Hunan housing department said that the central bank must loosen monetary policy and make sure policies are implemented at the commercials banks in order for credit to flow. A source close to the Ministry of Housing in Beijing, however, says the government is taking a wait-and-see attitude on the current policy adjustment. The central government is also planning next year's economic policies, and real estate is only one part of the picture.

Should sales fail to recover in October, one widely rumored move is a cut in the time required to qualify for an exception from real estate sales tax, from 5 years down to 2 years. Other tax cuts at the national or local level may also form the basis of round three of the real estate market rescue.

Activity has increased in October following the mortgage easing though. Centaline has seen customer traffic for existing homes climb 60% over September in the six largest cities. It has also seen prices climb across the board, with the prior week in Beijing seeing a 13.4% increase in average transaction price. Home sellers are refusing to negotiate again and raising their prices. This has some talking of a bifurcated market, with inventory overhang weighing on some cities, but prices rising in others.

All year I've been saying the central bank is not going to ease monetary policy based on the statements made by top officials. I realize the government could change its mind on a dime if need be, but there's been zero sign from the officials that count; their comments are as stridently against easy money as they were earlier in the year. Were the housing market to bifurcate, that will be the stake through the heart of easy money. There's absolutely no way, short of a crisis, that monetary policy will ease in the face of rising prices because it would immediately reflate the housing bubble, as fast as a match lights gasoline thanks to all the easing policies currently in place.

iFeng:地方官员频繁进京表达诉求 第三轮救市隐现

Abstract: before and after National Day, many local governments in housing construction, land system officials frequently to Beijing, with the central departments "will open a small." Are the demands of local governments to achieve, the present is still unknown. However, from the central to local micro-stimulus policies on the property market has not stopped. Implementation of the "loose credit" take months, if the market reaction is not, it should also consider the next step to relax.

China Times reporter Dong Ying Jie Chen Xiaoying Beijing and Shenzhen reported

Before and after the National Day, the central bank's credit policy loosening dawn finally brought a touch of warmth to the property market has long been bleak.

"Now that the central authorities have promoted the policy level, the local government of course put this policy as a last straw, I hope the policy at the local landing when to play the biggest role." Eastern province housing construction sector, an official Zhang (not his real name) on the "China Times "reporter said. To his knowledge, in around National Day, many local governments in housing construction, land system officials frequently to Beijing, with the central departments "will open a small."

Are the demands of local governments to achieve, the present is still unknown. However, from the central to local micro-stimulus policies on the property market has not stopped. Ministry of Housing, Ministry of Finance, People's Bank jointly issued a document recently introduced new regulations provident fund loans, Wuhan and other places also adjust the local fund policy.

Deputy Director of the Department of Housing and Urban Housing Policy Expert Committee Mr Gu told reporters that the current central policy on the real estate "tight" is not yet fully restored to normal, and now the central concern is whether the implementation of the credit limit relaxed policy on how the market reaction after landing, can No stop the market continues downward, the implementation of "loose credit" take months, if the market reaction is not, it should also consider the next step to relax.

Local officials frequently Beijing

"Our focus now is how to implement the second round of bailout policies, namely how to effectively implement relax credit limit on lending rates, since the high cost of bank funds, it is difficult to reduce, 7 discount interest rate floor is impossible." a city in southern China, an official told this reporter land systems, recently he has twice rushed to Beijing, the policy can relax on a larger level, to communicate with the Ministry of Housing.

"From the current point of view, the central is the hope that through lower mortgage interest rates, an increase in bank capital invested in mortgage terms to boost confidence in the real estate market, but when the implementation of this policy in place and can not reach the policy design needs." Zhang Jian told reporters, especially in the second and third tier cities, property transactions continued downward, banks still need to control risk, "For local governments, the policy actually not to fall, this is the most troublesome problem."

It is understood, October 13, the Shanghai branch of the Bank convened 18 banks held a Real Estate Deal briefing, requires Shanghai after implementation of the new standard with additional loans recognized condition that pay off the original loan to buy a new suite must be Shanghai ordinary residence, but even so, in the interest rates banks still tend to perform the benchmark interest rate, up to implement 5% discount

Shenzhen, a loan manager of a commercial bank, told reporters that for individual housing mortgage loans, the banks also face higher financing costs, loan difficult problem. Regulatory requirements for commercial banks to support just need is to such loans as policy loans to look at, but the commercial banks to pursue profits, which in itself is a contradiction, and therefore it is difficult to perform low bank interest rates.

The concern is that the implementation of the central repeatedly "targeted easing" this year in agriculture, micro and small shed change, etc., turn on the water source from the central bank, and does reduce the cost of capital, banks are willing to perform in accordance with the lower interest rate. But for the real estate industry, the central policies still remain in the propaganda and documents, real estate asset securitization "of the central four" mentioned in bank loan funds aimed at resolving the problem, but it seems in the industry, in the short term is difficult to implement.

Above a city in southern officials said the land system, the central temporarily not required for the first set and just needs to improve drainage in the capital, where it was raised on whether the property has also taken lenient policy orientation.

A source close to the Hunan Provincial Housing and Construction Office, told reporters, from short-term effects, the demands put forward by the current local government, I hope that the central continue to relax credit, commercial bank loans and urge the implementation details landing, relying on savings loan problem difficult to solve, need The central bank rediscount to commercial banks.

"Now the local governments 'run department' work or fighting each other, but the relationship between the provinces and cities better all through the air, so the local government's current target is more consistent, we are hoping to build on the progress by The central bank 'September 30' policy just out of warming effort to follow-up questions to clarify. "Zhang admitted to reporters.

Tax cuts or as the main direction

"However, from the central level, policies certainly not so frequent policy after landing, the effect is reflected in the market will take some time." A source close to the Ministry of Housing insiders told reporters, "First, the present attitude of the central wait, study the effects of policies, the second is based on macroeconomic trends set the tone for the economic work next year, the real estate market policies is just one part. "

Analysis of the industry, in September this year, the smooth performance of financial data, due to steady growth are still important current task, but less than expected recovery in domestic and foreign policy still continued to force. Therefore, in the case of limited fiscal space and monetary policy easing efforts during the year is expected to further increase.

"Just the overall economic environment, the recent weak performance of the main macroeconomic indicators, including real estate market adjustment has become a drag on growth in fixed assets investment of the important reasons, it is expected to continue to relax credit will be one aspect of the property market next policy adjustments." Above close Insiders Department of Housing and analysis, "In addition, in the long run, market transactions in the field of tax adjustment will also be possible."

Radius of the property, chief market analyst 邓志浩 said, "If we do not start in October real estate sales, after the central bank will consider dishing out in 2008 when the financial crisis Treasury tax big move: Personal Business Tax Levy and Exemption housing transfer time from five years to recover to 2 years. messages are not groundless. "

This reporter recently learned from the Beijing office to verify a number of real estate analysts, more than half of analysts believe that this news credible.

Above a city in South China Land System officials also believes that "the possibility of large tax cuts, but not expected so soon implemented on time." He said, because the credit limit was relaxed in the National Day, some banks have not yet implemented, the effect of how Sample need time to observe, there will be no major policy out shortly.

Beijing Centaline Dawei, chief analyst, told reporters that the next step may be introduced just to be directed against lowering standards, otherwise the banks' reluctance to lend. Not only that, the local government is expected to follow-up in terms of tax policy, etc. will be relaxed, the property will be the third round of bailout sequential appear.

In fact, the local government's "rescue" operation has begun. Recently, Wuhan Housing Fund Management Center issued a notice to purchase a second home loan fund minimum down payment ratio was adjusted to 30% housing price, and no mandatory requirement to achieve 60% of the total price of housing.

"For local governments, the real estate control policies can mainly provident fund loans, tax breaks and subsidies, there are many places in these three areas have been adjusted, compared with the 2008 bailout policies, degree On nearing And this, in fact, has been the attitude of the central acquiesced. "above insiders close to the Ministry of Housing said.

Hunan Provincial Association of Realtors chief economist Wang Gao believes that local real estate as a pillar industry still, Changsha revenue from land sales last year amounted to over 660 million this year, half did not complete, local land finance debt repayment needs. The future of the central and local governments will continue to relax regulation, may be introduced such as provident fund loans offsite unexpected measures.

Gu Yunchang think, and in 2011 the market was overheated and cooling is different, because after this round of market regulation is too cold to heat up, the financial support is the key, the current fund loan policy to make adjustments, but also to promote the real estate market, and to prevent excessive decline.

Market is expected to pick up

The central bank "September 30" a week after the release of the New Deal, although enforcement of the first suite of interest rate concessions reservations, but the major state-owned firms and joint-stock commercial banks recognize the universal implementation of the first suite room does not recognize loan policies. Policy after landing, Beijing, Shenzhen and other places of second-hand housing market pick up signs.

Centaline statistics show that after the November holiday, Centaline six new stores in the city second-hand housing tourists continues to increase, the average daily new source 11000, compared with September's daily average increase of about two-thirds. The Festival of the second week (October 8 -15 days), six cities of the Central Plains offer index rose across the board, including Beijing index after October 13 compensatory growth, rose as high as 13.4%.

Dawei that increase the amount of store visits, indicating the intention to purchase the crowd is increasing, which is the basis for the next volume recovery in the property market trading activity is being restored. Apart from a small portion of the current four-tier cities overstock too serious, the other city or will be fully stabilized, pressure on the stock will be less than the basic 20-month rose again.

According to the latest data show that the trading volume of Beijing second-hand housing market in the first half of October has also been picked up. As of October 15, Beijing second-hand housing net signed amounted to 2043 units. According to Zhang month I love my home, analysts said, because the November holiday reasons, net signed data lag, in October of second-hand housing half the actual volume has exceeded 5,000 units.

In addition, according to Albert I love my home market monitoring Research Institute, before 12 days in October, the Beijing I love my family signed a contract for the sale of second-hand housing amount (not including net signed) over the same period in September rose 121% over last year rose 64.2%. Chain of family property internal data show that in October the second week of trading volume grew 44 percent last week.

At the same time, there are houses in the sale of owner mentality has begun to change, not only is no room for negotiation, but preliminary prices. Analysis of the industry, as the impact of policy factors increased in October, wards and come to the House of frequency will accelerate the market price rebound will be more apparent.

In the new house, the developers are generally turned more optimistic attitude. "From the current policy trend, we already can relax psychologically, but from the market situation, said during the company's main goal this year is still accelerating to the inventory, the rapid return of funds, there will be big in the price adjustment. "Beijing, a large developer told reporters.

"We judge that the next few years China's real estate will still go up, you may not have before so great magnitude, but the trend overall is still the better, so we invest in China's real estate market is still very confident." Beijing Su Sotheby's International Real Estate CEO Kevin told reporters in October this year, the international auction giants Sotheby's announced the establishment of the first international real estate business in China, but also out of the Chinese market optimistic about the prospects for recovery.