In January, the sales continued to cool down, and the sales of head real estate enterprises decreased significantly. In January 2022, the real estate market as a whole continued the cooling trend since the second half of the year. The sales amount and area of most real estate enterprises fell year-on-year. The monthly sales of the top 100 real estate enterprises increased negatively for seven consecutive months since July, and the monthly sales area increased negatively for eight consecutive months since June. In January, the sales of head real estate enterprises continued to decline, and the sales amount of top5 / top6-10 / top11-20 in a single month decreased by 41% / 43% / 44% year-on-year.
The downward trend of the real estate market superimposed the pressure of enterprise funds, and the enthusiasm of real estate enterprises to acquire land was weak in January. In January 2022, the land added by the top 100 real estate enterprises was 84.2 billion yuan, a year-on-year decrease of 66.7%; The new land construction area was 23.9 million square meters, a year-on-year decrease of 43.8%. Among the top 100 real estate enterprises, only more than 10 real estate enterprises have land recorded, and only two real estate enterprises, green city and China Resources, have an amount of more than 5 billion yuan. Local urban investment and platform companies are the main force in land acquisition.
In January, the shrinking supply of the property market led to a decline in the overall inventory, and the transactions in the second-hand housing market continued to decline. The newly increased supply area of 29 key cities in January decreased by 43% and 58% year-on-year and month on month respectively, mainly due to the uncertainty such as the high base at the end of the year and the frequent occurrence of covid-19 epidemic. Affected by the reduction in supply, inventories in many cities fell slightly. The total transactions of second-hand houses in nine key cities in January decreased by 45% compared with the same period last year and 5% month on month. The decline was narrowed. Except Hangzhou and Suzhou, all other cities decreased.
Since January, the central government has firmly stated that the marginal easing of industrial policies has continued. Recently, the China Banking and Insurance Regulatory Commission pointed out that the risks in the financial field should be handled steadily, the bottom line of no systemic financial risks should be firmly maintained, the positioning of real estate without speculation should be adhered to, and the long-term mechanism of “stabilizing land prices, house prices and expectations” should be continuously improved. Recently, the Ministry of housing and urban rural development has said that it will resolutely and effectively deal with the risk of overdue delivery of real estate projects of individual real estate enterprises. The central bank also proposed to maintain the stable and orderly delivery of real estate credit and meet the reasonable financing needs of the real estate market. At present, the industry fundamentals are still in a downward trend, and the marginal easing of policy is expected to continue. With the support of policies such as receiving, M & A, issuing bonds and loans, the number of M & A events of real estate enterprises increased in January, and the performance of state-owned central enterprises in M & A was relatively bright.
Local governments have taken loose measures to boost demand due to urban policies, and the deregulation and tightening of pre-sale funds are mutual. Recently, some cities have implemented house purchase support policies, Tianjin has relaxed the settlement policy, and Guigang, Guangxi, has provided deed tax subsidies. According to incomplete statistics, since January, 15 cities across the country have taken house purchase incentive measures, mainly involving reducing the minimum down payment ratio of provident fund loans, increasing the maximum amount of provident fund loans, relaxing the application recognition conditions and providing house purchase subsidies, which is conducive to further releasing the reasonable demand for house purchase. In January, some cities adjusted the supervision of pre-sale funds, showing a situation of mutual tightness. Fuzhou is more stringent than the previous policies, and Yantai, Xiamen and Shijiazhuang have implemented differentiated supervision and relaxed to some extent. At present, there is a lack of a unified framework for the supervision of pre-sale funds. There is too strict implementation in some cities, and there is room for correction.
Investment suggestions: we believe that we should pay attention to four main investment lines at present: 1) development enterprises: Poly Developments And Holdings Group Co.Ltd(600048) , Seazen Holdings Co.Ltd(601155) , Shenzhen Overseas Chinese Town Co.Ltd(000069) , China Resources Land, Longhu group, China Vanke Co.Ltd(000002) , Xuhui holdings, China Construction Development International Holdings, etc; 2) Property management enterprises: Country Garden service, China Resources Vientiane life, Jinke service, Xuhui Yongsheng service, Baolong business, etc; 3) Track transformation Enterprises: Tianjin Guangyu Development Co.Ltd(000537) , Lushang Health Industry Development Co.Ltd(600223) ; 4) Real estate brokerage Enterprises: shells, etc.
Risk tips: project delivery risk, project sales collection risk, industry policy regulation risk.
