Signal release: the demand enters the core area
Recently, some banks in Heze, Shandong, Chongqing and Ganzhou, Jiangxi reduced the down payment ratio of personal housing loans to 20%. All the cities in this round of adjustment are non purchase restriction cities, which still complies with the provisions of the central bank in 2016 that “in cities where purchase restriction measures are not implemented, the minimum down payment proportion of commercial personal housing loans for residents’ families to purchase ordinary housing for the first time is 25% in principle, and all localities can float down by 5 percentage points”, which belongs to a reasonable adjustment under “urban implementation”. We believe that the adjustment of the down payment ratio means that the demand base has entered the core area of purchase and loan restrictions, which is expected to further open the space for local urban policies.
Historical review: focus and correction of industry downturn
In the history of resumption of trading, the down payment ratio of 2008q3-2010q2 and 2014q3-2016q3 was reduced. The housing loan down payment policy entered a loose cycle, which has a strong correlation with the decline of industry fundamentals. In 2008, due to the impact of the global financial crisis, the cumulative sales of commercial housing fell rapidly year-on-year, entering a negative range, with the largest cumulative decline of 19.8% in the middle of the year. The cumulative completion of real estate development investment has entered the downward channel since Q3. In the case of weak demand and continuous decline in development investment, the regulation of down payment ratio of housing loans has changed from tightening to loosening, opening a loose cycle; At the beginning of 2014, the market was cold, and the cumulative year-on-year growth rate of commercial housing sales entered the negative range again, with a maximum cumulative decline of 15.8%; The cumulative completed amount of real estate development investment also began to decline for two years year on year. In order to accelerate the destocking, the industry entered the double easing cycle of monetary policy and industrial policy, and the loan restriction policy was relaxed again.
From the perspective of historical regulation cycle, 1 As a whole, it shows the characteristics of orderly evolution from local to central and then to local. The two rounds of easing cycles have experienced the following evolution processes: the fundamentals of some cities are under too much pressure, the policy is marginal loose, and the down payment ratio is reduced; Relaxation of central leading top-level design; The policy began to transmit and gradually landed in other cities. 2. The adjustment of provident fund down payment policy generally precedes the adjustment of commercial loan down payment policy.
Future outlook: the loan restriction policy still has room for urban implementation
At present, the purchase of the first and second tier cities is generally restricted, the identification standard of the first house is relatively strict, and the down payment ratio is high. The down payment ratio of commercial loans for the first house stipulated by the purchase restriction cities is mostly in the range of 30% – 40%; The proportion of down payment stipulated by local governments in cities with no purchase restrictions on the third and fourth tier cities is in the range of 20% – 30%. Therefore, the lower limit of down payment ratio stipulated by some cities is usually about 10 PCT higher than the lower limit uniformly stipulated by the central bank. Under the pressure of fundamental differentiation, there is still much room for local policies due to cities, especially non purchase restricted cities are expected to follow up and adjust.
Industry clearing and virtuous circle require stable demand side expectations
We believe that the supply side reform is conducive to the establishment of a truly stable and healthy development period of the industry, and will still be the main path to solve the problems of the industry in the future. However, whether it is market-oriented M & A or the restart of the virtuous circle of the industry, it needs confidence repair and expected stability. The focus of real estate policy is expected to rebalance between deleveraging, risk control and steady growth. Especially with the increasing downward pressure on fundamentals in the first quarter, local policies need to further match the local fundamentals due to the scale of urban implementation. We are expected to see more adjustments in administrative regulation. However, the further relaxation of the demand side depends on the forced triggering mechanism at the industry or macro level: the industry’s credit risk is out of control, the fundamentals stall or the phased demands of stable growth at the macro level on the real estate are increased.
Grasp the beta of loose policy structure and the alpha of M & A
Investment suggestion: the future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios. Continuous recommendation: 1) high quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Xuhui holdings, etc; 2) High quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 3) High quality property management: Country Garden service, green city service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng, etc.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation and control remained high-pressure, and the pilot strength of real estate tax exceeded expectations; The risk of subjective measurement deviation of some data conclusions.
