On February 12, 2022, the sixth session of the 17th Tianjin People’s Congress opened. So far, the two sessions of 31 provinces, municipalities directly under the central government and autonomous regions (except Hong Kong, Macao and Taiwan) have been held successively. The local two sessions continue the central government’s policy guidance on the real estate industry and take real estate as one of the focuses of ensuring people’s livelihood. We sort out and summarize the contents related to real estate in the work reports of local governments. The main key words are “no speculation in real estate”, real estate industry / enterprise risk prevention and resolution, promoting the virtuous cycle of real estate industry, affordable housing construction and urban renewal.
Housing is still the main tone of the policy. The local two sessions continued the central government’s policy guidance on the real estate industry, took real estate as one of the focuses of ensuring people’s livelihood, and emphasized the implementation of real estate market regulation measures to maintain the accuracy, continuity and stability of policies and meet reasonable house purchase needs. In the government work report, 15 provinces and cities mentioned the need to promote a virtuous cycle of the real estate industry, 12 provinces and cities continued to emphasize “housing without speculation”, and 11 provinces and cities paid attention to the risks in the field of real estate, including the disposal and prevention of problematic real estate, performance risks, and the debt crisis of real estate enterprises.
Since 2008, China has successively implemented the policies of shanty town transformation and old transformation projects. In 2021, the 14th five year plan and the outline of long-term objectives for 2035 clearly put forward that urban renewal has been upgraded to a national strategy. Shed reform and old reform also belong to the category of urban renewal. This year, we will continue to promote urban renewal, with a total layout of 16 regions. The 22 year old reform target announced in the local government work report is about 20000 communities, which is expected to be implemented at a steady rate in the next four years. From the perspective of specific regulations, urban renewal began to enter the stage of refinement, with more emphasis on both retention, reconstruction and demolition, micro transformation, and avoiding large-scale demolition and construction.
The Ministry of housing and urban rural development said in January that it was necessary to expand the supply of affordable rental housing. During the 14th Five Year Plan period, 40 key cities initially planned to add 6.5 million units (rooms), which is expected to help 13 million new citizens and young people alleviate their housing difficulties. Among them, 2.4 million sets (rooms) of affordable rental housing were built and raised in 2022, an increase of 156% over 2021. At the local level, according to the documents of the two sessions, a total of 27 regions have made clear the layout of affordable housing construction. The 22-year target for the preparation of affordable rental housing is 1.585 million units. Taking the 936000 units newly prepared in 40 large and medium-sized cities in 21 years as a reference, the number of units prepared in 22 years has increased significantly. Among them, Beijing and Shanghai plan to build 150000 and 173000 affordable rental housing units, accounting for 37.5% and 36.8% of the supply in the 14th five year plan respectively.
Under the high base, transactions in new houses, second-hand houses and land markets are weak this week
The new housing market traded 4.31 million square meters this week, with a monthly year-on-year decrease of – 62.65%, a decrease of 30.39 PCT compared with the previous month; The accumulated inventory was 4.31 million square meters, the first-line and second-line de urbanization slowed down, and the speed of the third line and below was the same. The second-hand housing market traded 990000 square meters this week, with a monthly year-on-year decrease of – 68.85%, down 34.83pct compared with the previous month. The land market traded 6.18 million square meters this week, rolling for 12 weeks, with a year-on-year increase of – 44.64%; The total turnover was 4.6 billion yuan, rolling for 12 weeks, with a year-on-year increase of – 41.80%; The national average premium rate was + 3.32%, rolling for 12 weeks, with a year-on-year rate of -10.78pct.
This week, the Shenwan real estate index was – 0.73%, down 4.73 PCT from last week, ranking 25 / 31 higher, underperforming the CSI 300 index by 1.81 PCT. In terms of H shares, the wind Hong Kong real estate index this week was – 1.84%, down 4.36pct from last week, ranking 7 / 11 higher, leading the Hang Seng Index by 0.48pct; The kroney leading index of real estate stocks was – 3.03%, down 7.38pct from last week.
Grasp the merger and acquisition of the left side and the improvement of the concentration of the right side
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. Suggestions: 1) 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) ; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Xuhui holding group; 3) High quality property management: Country Garden service, xinchengyue service, Greentown service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng.
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; Subjective measurement deviation risk
