Mortgage interest rates continued to decline and the lending rate accelerated. Recently, Heze, Guangzhou and other cities lowered the mortgage interest rate, and the five-year LPR was lowered again after 21 months in January. According to the data of the shell Research Institute, the interest rates of the first set of housing loans and the second set of housing loans in the mainstream of 103 key cities monitored in January 2022 were 5.56% and 5.84%, both of which fell by 8 basis points compared with the previous month, and fell for four consecutive months since the high point of 9:00 in 2021; The average lending cycle in January was 50 days, 7 days shorter than that of the previous month. On the whole, the overall mortgage interest rate and lending cycle continued to improve in January.
Fundamental pressure remains, and the mortgage end is expected to continue to improve. Although the end volume and price of mortgages have improved, the medium and long-term loans of new residents in January still decreased by 21% year-on-year, and the average daily transactions in key cities in the first 18 days of February decreased by 41.5% year-on-year. The downward pressure on the market remains. We judge that the market repair path in the future will be gradually repaired according to the path of “policy credit confidence property market real estate enterprises investment”. At present, it is still in the stage of policy warming and boosting confidence. We believe that whether the pre-sale fund supervision or M & A loans are not included in the “three red lines” and other policies are more relief policies, The core of revitalizing real estate still lies in the improvement of cash flow at the operating end due to the recovery of the sales end, and the follow-up demand side policies still need to be further strengthened. As an important influencing factor on the demand side, mortgage interest rate is expected to continue to improve in the future.
There is broad potential downside space at the mortgage end, more than 100bp from the historical low. According to the data of the central bank, the comprehensive cost of personal mortgage in 2021q4 is 5.63%, which is 1.21 times of the five-year LPR in the same period, and the floating proportion is the highest level since 2009. Comparing the two rounds of low points in 2009 Q2 and 2016 Q3, from the absolute value difference, the benchmark price difference in the same period and the relative ratio difference with the benchmark, the corresponding average decline space of the current mortgage interest rate is 2.23pct and 1.27pct respectively, and the potential downward space is still sufficient. According to the total price of 1 million yuan, the down payment of 50% and the mortgage interest rate of 5.63%, the mortgage interest rate of 30-year mortgage will be reduced by 10, 30, 50 and 100 bp respectively, and the corresponding monthly supply will be reduced by 1.1%, 3.3%, 5.4% and 10.7% respectively.
The second quarter is an important observation window of the property market, and the demand side policy is still the key. From the experience of 2014-2015 and 2018-2019, the positive and stable sales of the real estate market probably lags behind the decline of mortgage interest rate by about 7 months. According to the shell data, the current round of mortgage interest rate has peaked in September 2021. According to the lag cycle of about 7 months, theoretically, the sales in the second quarter is expected to stabilize gradually. However, from 2014 to 2015, China is still in the process of rapid urbanization, the market demand is still strong, and the policy deregulation is strong; There was no large-scale liquidity crisis of real estate enterprises in 2018-2019; We expect that the current round of market confidence will take longer to repair. If the follow-up demand side policies do not have obvious force, and the high base in the same period of last year is superimposed, we do not rule out the further delay of the stabilization of the sales side.
Investment suggestions: continue to pay attention to the valuation repair of the sector brought by the improvement of the policy side, and the development sector pays attention to the leading real estate enterprises Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Vanke A, etc. with strong short-term pressure resistance and prominent medium and long-term competitive advantages; At the same time, if the follow-up demand side policies are gradually strengthened and high-quality private enterprises have more room for repair, it is suggested to pay attention to Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Longguang group, etc. In terms of diversified business, the current valuation of the property management sector has reached a historical low, the overlapping performance period is approaching, and the cost performance continues to highlight. We are optimistic about the property management leaders with outstanding comprehensive strength, such as country garden service, poly property, xinchengyue service, Jinke service, and commercial operators with strong asset light output, such as Xingsheng commerce.
Risk tips: 1) reduce the risk of supply adequacy: if the local city continues to be cold and the new land storage scale of real estate enterprises is insufficient, it will have a negative impact on the subsequent supply of goods, and then affect the sales, commencement, investment and completion of the industry. 2) Large scale impairment risk of real estate enterprises: if the de industrialization pressure of the real estate market exceeds expectations and the sales are greatly changed from price to quantity, it will bring some impairment risk of high price in the early stage. 3) The risk that the policy care is not as good as expected: if the effectiveness of the policy is insufficient, the adjustment range and time of the real estate market exceed expectations, which will have a negative impact on the development of the industry
