Content summary
This week’s core view: the policy continues to increase and the dynamic profit recovery of real estate enterprises. The first round of centralized land supply in Beijing has warmed up, the transaction floor price has decreased, the construction requirements have been reduced, and the land acquisition profit has been restored. It is expected that the profit level of the first batch of centralized land supply in 22 cities will generally recover. In addition to the supply side, some cities have opened up room for house prices to rise, mortgage interest rates have fallen, house prices have resumed rising expectations, and demand side profits are also continuing to repair. At the same time, Heze, Chongqing, Ganzhou and other non restricted cities have reduced the down payment ratio to 20%, releasing more demand easing signals. It is expected that the follow-up demand easing policy will be strengthened. Improved demand and some cities with slightly higher market heat will join the demand side relaxation, and the dynamic profits of real estate enterprises will be further repaired. Under the multi-dimensional policy, the state-owned enterprises and high-quality private enterprises will continue to benefit, and the property sector will usher in significant repair.
Key policy analysis: Changsha held a symposium on real estate development enterprises and put forward the pilot of classified statistics of house price index. The index of rigid demand housing is no more than 5% per year, and the growth of improved housing is controlled by 8% – 10% according to the income growth level of urban residents in Changsha, so as to reasonably meet the demand for house purchase at different levels, breaking through the previous restriction of 5% house price increase, Allowing some projects to have relatively high price increases has opened up the profit space of real estate enterprises from the demand side. Heze took the lead in reducing the down payment ratio of loans to “people without houses and loans”, further releasing the positive signal of relaxation on the demand side: 1) house prices in Heze continued to fall, and new house sales fell year-on-year for five consecutive months; 2) At the end of 2018, it took the lead in liberalizing sales restrictions; 3) Heze is a representative endogenous third and fourth tier city. After Heze, Chongqing, Ganzhou, Nanning and Foshan also reduced the proportion of down payment, sending a signal of continuous easing of policies to the market, especially before the upcoming industry opportunity window “xiaoyangchun”, which can drive the positive expectation of the overall market.
One week market review: this week (2022 / 2 / 212022 / 2 / 27), Shenwan real estate fell by – 3.22%, underperforming the Shanghai Composite Index by 2.09pct, ranking 26th among various sectors, and the Hang Seng real estate construction industry index fell by – 7.08%, underperforming the Shanghai Composite Index by 5.95pct. The top three increases were: Black Peony (Group) Co.Ltd(600510) (48.23%), Tianjin Guangyu Development Co.Ltd(000537) (12.67%), Shenzhen Wongtee International Enterprise Co.Ltd(000056) (11.68%). The top three decreases were: Longguang group (- 33.83%), E-House enterprise holding (26.11%), rongchuang China (- 21.86%). This week (2022 / 2 / 212022 / 2 / 27), Hang Seng property service and management sector fell – 9.75%, outperforming the Shanghai Composite Index by 8.63 PCT, Underperformed the Hang Seng China enterprise index by 3.35pct, ranking last among various sectors. Only poly property (0.90%) rose this week, and the top three declines this week were rongchuang service (- 20.97%), Baolong Commerce (- 16.13%) and Jinke service (- 16.06%).
Real estate market monitoring: this week (2022 / 2 / 192022 / 2 / 25), the transaction area of new houses in 30 large and medium-sized cities was 2618300 square meters, with a month on month increase of 20.6% and a year-on-year increase of 390.1% (affected by the Spring Festival week). The transaction area of second-hand houses in 16 cities was 1201400 square meters, an increase of 12.4% month on month and 340.8% month on month (affected by the Spring Festival week). Last week (2022 / 2 / 142022 / 2 / 20), the land supply and construction area of 100 large and medium-sized cities was 17.098 million square meters, an increase of 35% year on year and a decrease of 22% month on month. The land transaction and construction area was 115706 million square meters, a decrease of 7.2% month on month, an increase of 21.4% month on month, and the batch sales ratio was 1.47. The land heat picked up slightly compared with last week. Beijing ended the first round of centralized land supply in 2022 in February, with a total transaction amount of 48.023 billion yuan. There were 18 land linked transactions, 17 transactions and 1 auction. The auction rate decreased, and the overall premium rate was 4.46%. Among them, there were 8 zero premium transactions, 3 with a premium rate of more than 10% and a premium rate of up to 15%. The overall land market is relatively stable, there is no significant premium or auction, the land market has warmed up, and the profit margin of land acquisition has increased.
Financing of real estate enterprises: this week (2022 / 2 / 212022 / 2 / 25), the total amount of domestic new bonds issued by real estate enterprises was 13.35 billion yuan, up 16% year-on-year and 4.5% month on month. In terms of trust issuance, 26 real estate trusts were issued this week, with an issuance scale of 4.045 billion yuan, an average annual yield of 7.5% and an average term of 1.59 years.
Risk factors: policy risk: the progress of policy relaxation is less than expected, and the policy regulation of real estate tax and pre-sale funds is more than expected. Market risk: the decline of sales in the real estate industry exceeded expectations.
