Global economic defense battle started
Editor’s note: This article comes from WeChat public account: 90-degree real estate (ID: dc90du) , author: Li Yujia, authorized reprint
March 3, Beijing time, the Federal Reserve cut interest rates by 50 points in an emergency. Prior to this, the Australian and Malaysian central banks have cut interest rates by 25 basis points. Prior to this, the G7 Finance Ministers’ Meeting stated that they should follow China, Japan, South Korea and Singapore and other major Asia-Pacific economies and pursue proactive fiscal policies. After the US Federal Reserve cut interest rates, on March 4, Saudi Arabia, the United Arab Emirates, Hong Kong, China, etc. immediately followed.
1 The scenery is so good, see opportunities with foreign investment
On March 4, the People’s Bank of China announced that the current liquidity of the banking system is reasonable and abundant, and that there will be no reverse repurchase operations on March 4. This means that the People’s Bank of China has not followed up with the Fed’s interest rate cuts, showing a certain degree of determination. Obviously, the epidemic situation in China has been controlled, and the central bank has invested 3 trillion yuan in liquidity since February 3. At present, what needs to be done is to put in place a package of resumption and resumption policies.
But there is no doubt that for China, the Fed’s interest rate cut has two effects:
First, the space for loose monetary policy has opened. In the past, worried about capital outflows, the property market and the stock market were too hot, the central bank was careful when following interest rate cuts. In the future, the central bank will release liquidity to entities through SLF, MLF, OMO, inclusive finance, targeted RRR cuts, etc.
Second, the RMB exchange rate has strengthened. Gold rose sharply, the US dollar index fell, and the world sought safe-haven assets. After the Fed cuts interest rates, the 10-year Treasury bond spread between China and the US has expanded to 160 basis points. Which country is invested? The risk-free rate says it all. The epidemic situation in China has been properly dealt with, and the RMB exchange rate will strengthen in the future to attract safe-haven funds, which will be beneficial to asset markets including the stock market and the property market.
Over the past few years, even though the state has repeatedly emphasized that “housing and housing are not speculated,” foreign capital has still shown great interest in Chinese properties. According to Savills Davis’ report, from 2017 to 2019, the trend of bulk property transactions in first-tier cities has increased, demonstrating the favor of foreign capital for property in China’s core cities. Shanghai has been the most mature city for major property transactions, and Shenzhen has also attracted foreign investment in the past two years.
Figure: Trends in bulk property transactions in first-tier cities from 2017 to 2019
Data source: Savills Savills
In terms of the size of a single transaction, from 2017 to 2019, the four cities of Beijing, Shanghai, Guangzhou and Shenzhen all showed an upward trend. Obviously, foreign capital’s confidence in China’s property market is relatively firm. Therefore, foreign capital inflows to China will increase in 2020, especially in the core areas of hot cities, and commercial offices will welcome opportunities. Here, I suggest that everyone pay attention to CBD apartments, and Shenzhen and Guangzhou have begun to adjust their policies.
2 LPR, the descending channel is open
In August of last year, the loan pricing reform, from the benchmark interest rate to the LPR (market quoted interest rate), the one-year LPR interest rate was reduced by 26 BP, and the five-year LPR interest rate was reduced by 10 BP. Obviously, China’s interest rate cut channel has opened. This is because we have to bail out the small and medium-sized enterprises this year and complete the various targets of the “Thirteenth Five-Year Plan” (this is a hard task). In the longer term, interest rate cuts are also a general trend.
In the past few years, China ’s economic growth rate has dropped from 8% to 6%, and it will continue to decline in the future (possibly to about 5%). The decline in GDP growth means that the return on investment has fallen. Can financing costs not fall? For example, renters’ income has dropped year after year, can landlord rents still rise? Therefore, whether you invest or asset allocation, we must consider the long-term decline in interest rates in the future.
In 2020, external demand is beyond hope. Fortunately, our domestic demand is very strong. This is a Western country including the United States. No matter how envious it is, we cannot get it. After the epidemic, a package of domestic demand incentive plans was released. As of March 3, 13 provinces and municipalities have released investment plans for key projects in 2020. Among them, 8 provinces announced plans to invest a total of 33.8 trillion yuan.
In 2008, “4 trillion” broke the traditional infrastructure, interconnected “Great China” and brought unprecedented opportunities for “Internet +”; the “new infrastructure” (5G, Industrial Internet, “Smart cities; education, public health, medical and other” shortcomings “) will not only foster innovative industries and increase new kinetic energy, but will also erupt the metropolitan economy and domestic consumption.
At present, local debt is relatively high, which encourages infrastructure investment, and the 5-year LPR will also enter a downward channel. In addition, we must build a society of domestic demand, release consumer demand, and meet residents’ aspirations for a better life, so that everyone has a “feel of gain”, and no-household households must realize a “dream of a house.” As far as the property market is concerned, the word “stable” (high housing prices continue), but residents’ income has fallen, and they cannot obviously increase leverage. This will reduce costs, and LPR will have to fall.
3 Another “rate cut”, quietly on the road
From March 1st, the benchmark for pricing existing mortgage loans should be changed from the original benchmark interest rate to the interest rate under LPR pricing. As I said just now, the 5-year LPR will continue to decline in the future. Naturally, most people choose to switch to LPR (instead of fixed interest rates). Interestingly, when the bank promotes this policy, it also encourages everyone to switch to LPR. The following is the promotion of CCB.
This “interest rate transition” involving millions of people, we only know that the monthly supply is 2 kg less pork, but there is a big game behind it.
In the future, the policy of administrative intervention has gradually stabilized, and the interest rate policy is the weapon of regulation in the property market. However, the existing mortgage loans are not affected by LPR, which greatly reduces the regulation. The property market has entered the era of stocks. The annual increase in houses is only 1.5 billion square meters, while the stock of commercial buildings is nearly 30 billion square meters. A house of such a large size is subject to central bank policy management, and the entire property market is controllable.
After conversion to LPR, 30 billion square meters of stock houses have also been affected by regulation. Even if your house does not trade, as long as there is a mortgage, it will become the object of regulation. Of course, many houses do not have a mortgage, but LPR is the main cost of the house, and it will affect this part of the house in anticipation. For example, LPR has fallen, and many people will firmly hold the house in their hands or think they should buy another.
4 Handle the game of real estate
In the future, “stabilizing house prices” is a long-term strategy. House prices will not rise sharply, but it will not work if they do not rise. If it does not rise, the various costs of holding a house will become apparent, such as monthly payments, property costs, and maintenance costs. In particular, the opportunity cost of buying a house is scary. In recent years, many people have invested in buying a house with an investment mentality. Once the house price does not rise, or the increase is small, the opportunity cost of funds will be calculated.
Now, the bank guarantees financial management, the return rate can reach 4%, and the fund’s return rate is even higher (the picture below is the author’s mobile banking financial product). In this case, if many people think that holding a house is not a good deal, he will definitely throw it away. Now, some outskirts of Shenzhen “”Residential homes”, even if they were bought in 2015, after considering the taxes and fees of commercial transactions, many of these products have failed to outperform financial management.
If many people have such expectations, the property market will be “unstable”! How to do it? By lowering the LPR, we have formed the expectation of “decreasing interest rates and reducing monthly supply.” Since November 2019, the 5-year LPR has fallen by 10 points, and the monthly supply has not saved much money. However, the media said in an overwhelming manner that the property market has “reduced interest rates”, which is a huge positive for residents’ expectations of the property market.
The fundamentals of the US economy are not bad. The reason why interest rates are cut is because of concerns about stock market problems. Financial assets account for the bulk of US household asset allocation. The stock market plummeted, residents’ wallets bleed, and they were unable to spend, and consumption was the number one driver in the United States. The assets of Chinese residents are mostly in the property market. As long as the property market is stable, the “fund pool” of the whole society will be stable, consumption will be stable, and the people’s expectations are also stable.
As long as the stability is expected, the funds will not be scrambled. With the hard work and resilience of the Chinese people, which is unmatched by the Chinese people, the economy will have no major problems. Taken as a whole, China’s property market will be more optimistic in the future, especially in several metropolitan areas that are growing poles. Of course, the opening of interest rate cuts and the state’s stabilization of the property market is not a signal of a sharp rise in house prices. You see, Zhumadian has increased its leverage for residents and Guangzhou has relaxed its “class housing”, and all have been stopped. Shenzhen emphasizes “strict control”. Therefore, the property market is optimistic. It is stable and rising, not another bubble opportunity.
5 Market sentiment, subtle changes
Perhaps, companies don’t think so.
Today, the marketing of a TOP50 company always asserts confidently that the United States’ financial epidemic cannot be controlled, including China. Water discharge is inevitable. The current situation is very similar to the end of 2008. Both the top and the bottom are very anxious. Developer financing policies have begun to loosen. Therefore, since the end of January, there was an inclusive policy of 5% discount. Now it has also been received by the general manager.
OtherA housing company has not yet opened their sales office (the plan is open at the end of February). They are very anxious, but the local government is more anxious. The land transfer has been postponed. It is said that by the end of March, the rescue policy In the brewing, when and when will be released, what content will be kept strictly confidential. Regarding the price reduction promotion, the company’s investment director said that with fewer projects and high land prices, the probability of price reduction is very low.
In short, with the easing of monetary policy, especially after the decline in LPR, coupled with the continued bailout policies in various places, especially the widespread release of deferred repayment policies, developers’ pessimism began to ease. Now, the world is starting to release water. After the transition to LPR in March, the market generally believes that mortgage rates will decline. Therefore, there are very few “real price cuts” and many promotions. Among the companies consulted by the author, if they really intend to buy a house, a 99% discount is common, especially for online sales.
At present, the mood of buyers is very complicated. On the one hand, the mood of buying a house is still relatively weak, and many people are unwilling to go out. However, the subtle changes in the policy environment and financial environment are combined. Gradually, some people began to worry that house prices rose after the epidemic. After all, the policy is underpinning, and the currency has begun to be put on a large scale. It is difficult to guarantee that house prices will not rise at the end of this year. The author believes that those with potential home purchase intentions are indeed at the bottom of the market, but don’t worry too much. You can choose from many options. Many developers still have discounts.
In addition, the current policy on the property market is still very strict. For example, the “one-day trip” for loosening apartments in Guangzhou has shown that “the property is not speculated” cannot be exceeded, which is very obvious for the expected control. However, pick the right house for you and compare it with the surroundings. If you are still satisfied with the cost performance and supporting facilities, decisively go for it, especially just need and improve! In the future, it will not rise sharply, but it will rise steadily!
In August of last year, the loan pricing reform, from the benchmark interest rate to the LPR (market quoted interest rate), the one-year LPR interest rate was reduced by 26 BP, and the five-year LPR interest rate was reduced by 10 BP. Obviously, China’s interest rate cut channel has opened. This is because we have to bail out the small and medium-sized enterprises this year and complete the various targets of the “Thirteenth Five-Year Plan” (this is a hard task). In the longer term, interest rate cuts are also a general trend.
In the past few years, China ’s economic growth rate has dropped from 8% to 6%, and it will continue to decline in the future (possibly to about 5%). The decline in GDP growth means that the return on investment has fallen. Can financing costs not fall? For example, renters’ income has dropped year after year, can landlord rents still rise? Therefore, whether you invest or asset allocation, we must consider the long-term decline in interest rates in the future.
In 2020, external demand is beyond hope. Fortunately, our domestic demand is very strong. This is a Western country including the United States. No matter how envious it is, we cannot get it. After the epidemic, a package of domestic demand incentive plans was released. As of March 3, 13 provinces and municipalities have released investment plans for key projects in 2020. Among them, 8 provinces announced plans to invest a total of 33.8 trillion yuan.
In 2008, “4 trillion” broke the traditional infrastructure, interconnected “Great China” and brought unprecedented opportunities for “Internet +”; the “new infrastructure” (5G, Industrial Internet, “Smart cities; education, public health, medical and other” shortcomings “) will not only foster innovative industries and increase new kinetic energy, but will also erupt the metropolitan economy and domestic consumption.
At present, local debt is relatively high, which encourages infrastructure investment, and the 5-year LPR will also enter a downward channel. In addition, we must build a society of domestic demand, release consumer demand, and meet residents’ aspirations for a better life, so that everyone has a “feel of gain”, and no-household households must realize a “dream of a house.” As far as the property market is concerned, the word “stable” (high housing prices continue), but residents’ income has fallen, and they cannot obviously increase leverage. This will reduce costs, and LPR will have to fall.
3 Another “rate cut”, quietly on the road
From March 1st, the benchmark for pricing existing mortgage loans should be changed from the original benchmark interest rate to the interest rate under LPR pricing. As I said just now, the 5-year LPR will continue to decline in the future. Naturally, most people choose to switch to LPR (instead of fixed interest rates). Interestingly, when the bank promotes this policy, it also encourages everyone to switch to LPR. The following is the promotion of CCB.
This “interest rate transition” involving millions of people, we only know that the monthly supply is 2 kg less pork, but there is a big game behind it.
In the future, the policy of administrative intervention has gradually stabilized, and the interest rate policy is the weapon of regulation in the property market. However, the existing mortgage loans are not affected by LPR, which greatly reduces the regulation. The property market has entered the era of stocks. The annual increase in houses is only 1.5 billion square meters, while the stock of commercial buildings is nearly 30 billion square meters. A house of such a large size is subject to central bank policy management, and the entire property market is controllable.
After conversion to LPR, 30 billion square meters of stock houses have also been affected by regulation. Even if your house does not trade, as long as there is a mortgage, it will become the object of regulation. Of course, many houses do not have a mortgage, but LPR is the main cost of the house, and it will affect this part of the house in anticipation. For example, LPR has fallen, and many people will firmly hold the house in their hands or think they should buy another.
4 Handle the game of real estate
In the future, “stabilizing house prices” is a long-term strategy. House prices will not rise sharply, but it will not work if they do not rise. If it does not rise, the various costs of holding a house will become apparent, such as monthly payments, property costs, and maintenance costs. In particular, the opportunity cost of buying a house is scary. In recent years, many people have invested in buying a house with an investment mentality. Once the house price does not rise, or the increase is small, the opportunity cost of funds will be calculated.
Now, the bank guarantees financial management, the return rate can reach 4%, and the fund’s return rate is even higher (the picture below is the author’s mobile banking financial product). In this case, if many people think that holding a house is not a good deal, he will definitely throw it away. Now, some outskirts of Shenzhen “”Residential homes”, even if they were bought in 2015, after considering the taxes and fees of commercial transactions, many of these products have failed to outperform financial management.
If many people have such expectations, the property market will be “unstable”! How to do it? By lowering the LPR, we have formed the expectation of “decreasing interest rates and reducing monthly supply.” Since November 2019, the 5-year LPR has fallen by 10 points, and the monthly supply has not saved much money. However, the media said in an overwhelming manner that the property market has “reduced interest rates”, which is a huge positive for residents’ expectations of the property market.
The fundamentals of the US economy are not bad. The reason why interest rates are cut is because of concerns about stock market problems. Financial assets account for the bulk of US household asset allocation. The stock market plummeted, residents’ wallets bleed, and they were unable to spend, and consumption was the number one driver in the United States. The assets of Chinese residents are mostly in the property market. As long as the property market is stable, the “fund pool” of the whole society will be stable, consumption will be stable, and the people’s expectations are also stable.
As long as the stability is expected, the funds will not be scrambled. With the hard work and resilience of the Chinese people, which is unmatched by the Chinese people, the economy will have no major problems. Taken as a whole, China’s property market will be more optimistic in the future, especially in several metropolitan areas that are growing poles. Of course, the opening of interest rate cuts and the state’s stabilization of the property market is not a signal of a sharp rise in house prices. You see, Zhumadian has increased its leverage for residents and Guangzhou has relaxed its “class housing”, and all have been stopped. Shenzhen emphasizes “strict control”. Therefore, the property market is optimistic. It is stable and rising, not another bubble opportunity.
5 Market sentiment, subtle changes
Perhaps, companies don’t think so.
Today, the marketing of a TOP50 company always asserts confidently that the United States’ financial epidemic cannot be controlled, including China. Water discharge is inevitable. The current situation is very similar to the end of 2008. Both the top and the bottom are very anxious. Developer financing policies have begun to loosen. Therefore, since the end of January, there was an inclusive policy of 5% discount. Now it has also been received by the general manager.
OtherA housing company has not yet opened their sales office (the plan is open at the end of February). They are very anxious, but the local government is more anxious. The land transfer has been postponed. It is said that by the end of March, the rescue policy In the brewing, when and when will be released, what content will be kept strictly confidential. Regarding the price reduction promotion, the company’s investment director said that with fewer projects and high land prices, the probability of price reduction is very low.
In short, with the easing of monetary policy, especially after the decline in LPR, coupled with the continued bailout policies in various places, especially the widespread release of deferred repayment policies, developers’ pessimism began to ease. Now, the world is starting to release water. After the transition to LPR in March, the market generally believes that mortgage rates will decline. Therefore, there are very few “real price cuts” and many promotions. Among the companies consulted by the author, if they really intend to buy a house, a 99% discount is common, especially for online sales.
At present, the mood of buyers is very complicated. On the one hand, the mood of buying a house is still relatively weak, and many people are unwilling to go out. However, the subtle changes in the policy environment and financial environment are combined. Gradually, some people began to worry that house prices rose after the epidemic. After all, the policy is underpinning, and the currency has begun to be put on a large scale. It is difficult to guarantee that house prices will not rise at the end of this year. The author believes that those with potential home purchase intentions are indeed at the bottom of the market, but don’t worry too much. You can choose from many options. Many developers still have discounts.
In addition, the current policy on the property market is still very strict. For example, the “one-day trip” for loosening apartments in Guangzhou has shown that “the property is not speculated” cannot be exceeded, which is very obvious for the expected control. However, pick the right house for you and compare it with the surroundings. If you are still satisfied with the cost performance and supporting facilities, decisively go for it, especially just need and improve! In the future, it will not rise sharply, but it will rise steadily!
In the future, “stabilizing house prices” is a long-term strategy. House prices will not rise sharply, but it will not work if they do not rise. If it does not rise, the various costs of holding a house will become apparent, such as monthly payments, property costs, and maintenance costs. In particular, the opportunity cost of buying a house is scary. In recent years, many people have invested in buying a house with an investment mentality. Once the house price does not rise, or the increase is small, the opportunity cost of funds will be calculated.
Now, the bank guarantees financial management, the return rate can reach 4%, and the fund’s return rate is even higher (the picture below is the author’s mobile banking financial product). In this case, if many people think that holding a house is not a good deal, he will definitely throw it away. Now, some outskirts of Shenzhen “”Residential homes”, even if they were bought in 2015, after considering the taxes and fees of commercial transactions, many of these products have failed to outperform financial management.
If many people have such expectations, the property market will be “unstable”! How to do it? By lowering the LPR, we have formed the expectation of “decreasing interest rates and reducing monthly supply.” Since November 2019, the 5-year LPR has fallen by 10 points, and the monthly supply has not saved much money. However, the media said in an overwhelming manner that the property market has “reduced interest rates”, which is a huge positive for residents’ expectations of the property market.
The fundamentals of the US economy are not bad. The reason why interest rates are cut is because of concerns about stock market problems. Financial assets account for the bulk of US household asset allocation. The stock market plummeted, residents’ wallets bleed, and they were unable to spend, and consumption was the number one driver in the United States. The assets of Chinese residents are mostly in the property market. As long as the property market is stable, the “fund pool” of the whole society will be stable, consumption will be stable, and the people’s expectations are also stable.
As long as the stability is expected, the funds will not be scrambled. With the hard work and resilience of the Chinese people, which is unmatched by the Chinese people, the economy will have no major problems. Taken as a whole, China’s property market will be more optimistic in the future, especially in several metropolitan areas that are growing poles. Of course, the opening of interest rate cuts and the state’s stabilization of the property market is not a signal of a sharp rise in house prices. You see, Zhumadian has increased its leverage for residents and Guangzhou has relaxed its “class housing”, and all have been stopped. Shenzhen emphasizes “strict control”. Therefore, the property market is optimistic. It is stable and rising, not another bubble opportunity.