Matters:
The general office of Zhengzhou Municipal People’s government issued the notice on promoting the virtuous cycle and healthy development of the real estate industry, and put forward 19 relevant measures from five aspects: supporting reasonable housing demand, improving housing market supply, increasing credit financing support, promoting the construction and transformation of resettlement housing, and optimizing the real estate market environment.
Ping An View:
We will promote the monetized resettlement of shed reform and support reasonable housing demand. In terms of supporting reasonable housing needs, including providing house purchase subsidies for college students, migrant workers can apply for housing provident fund loans according to the same conditions as the employees paid in the city, encouraging the elderly to join their relatives for the elderly, allowing them to join their families to buy a new set of housing, etc. At present, Zhengzhou city registered residence limited family purchase 2 sets, single and foreign registered residence restriction purchase 1 sets, the document does not explicitly allow to Zheng’s family support for the elderly to buy a family to buy new homes, whether to meet the current restriction requirements, if the breakthrough means additional new purchase quota. At the same time, the implementation of the three-year action of resettlement housing construction, adhering to the principle of monetary resettlement, and encouraging the relocated people to choose monetary resettlement are conducive to injecting new demand into the housing market.
Second home loans “recognize loans but not houses”, and increase credit support for housing enterprises in difficulty. In terms of personal credit, financial institutions in Zheng will be guided to increase the investment of personal housing mortgage loans, reduce the housing loan interest rate, and implement the first house loan policy for families who have a house and have settled the corresponding loans. The down payment ratio will be reduced from 60% to 30%, that is, the second house loan will be “loan but house”, It is the first key city to deregulate “housing and loan recognition” since the tightening of regulation in 2016, which is conducive to reducing and improving the pressure of demand for home ownership. In terms of financing of real estate enterprises, regularly organize the connection between banks and enterprises, encourage financial institutions to extend and renew loans to troubled enterprises, increase the support for M & A loans of real estate enterprises in accordance with laws and regulations, risk control and commercial sustainability, and alleviate the operation pressure of the capital chain of market players; At the same time, financial institutions that support development loans and reduce the interest rate of personal mortgage loans will be given priority support in terms of new government financial deposits, fund accounts and other deposits, so as to further improve the enthusiasm of financial institutions to participate in the risk resolution of the real estate industry.
Stabilize the supply rhythm of residential land and improve the linkage mechanism between house price and land price. According to the de commercialization cycle of commercial housing in each area, reasonably determine the supply of new residential land to ensure the balance between supply and demand of commercial housing. When the decontamination cycle is less than 18 months, moderately increase the supply of residential land; When the decontamination cycle is more than 18 months, the supply of residential land shall be moderately reduced. The minimum price of land can be reduced within 20 years after the implementation of the “auction price limit” policy, and the minimum price of land can be paid in the future.
As an important provincial capital city, the deregulation of the real estate market in Zhengzhou has a certain demonstration effect: previously, low-energy cities such as Beihai and Heze successively issued policies to reduce the proportion of provident fund or commercial loan down payment, and the housing loan interest rate in key cities has also continued to decline since peaking in September 2021. However, the sales of top 100 real estate enterprises decreased by more than 40% year-on-year in February, and the average daily transaction in 50 cities decreased by 24.7% month on month, Property market transactions have not improved. Zhengzhou is one of the important provincial capitals in China. In 2021, the transaction area of commercial housing decreased by 25% year-on-year, much weaker than that in the same period in China (1.1%). The policy of “recognizing loans but not houses” is conducive to injecting confidence into the property market and has a certain demonstration effect in the country. At present, the downward pressure on the real estate market is still large, and the financial difficulties of some real estate enterprises have not been solved. The follow-up fine-tuning in regions or cities with high pressure will not be ruled out, because the urban implementation policies will continue to be interpreted.
Investment suggestion: Although the policy tone has gradually warmed up since September 2021, it is still limited to capital relief or fine-tuning under the original policy framework. The deregulation of “house and loan recognition” in Zhengzhou this time has strong demonstration significance. Looking back, the current downward pressure on the property market is still large, and the financial difficulties of some real estate enterprises have not been solved. Whether from the overall situation of “stable growth” or avoiding systemic risks in the industry, there is still room for improvement on the policy side, and the sector valuation is expected to continue to repair. In the medium and long term, with the withdrawal or contraction of some real estate enterprises in the painful period of this round, the overall pattern of the industry is expected to be optimized, and the market share and profitability of brand real estate enterprises with financing and control are expected to be improved. 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, and moderately pays attention to the flexible second-line targets such as Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Seazen Holdings Co.Ltd(601155) , etc. In terms of diversified business, the current valuation of the property management sector has reached a historical low and the cost performance is prominent. With the continuous deregulation of policies and the improvement of the capital side of development enterprises, it is also expected to bring high-quality property management valuation repair. We are optimistic about property management leaders with outstanding comprehensive strength, such as country garden service, poly property, xinchengyue service, Jinke service, etc, And commercial operators with strong asset light output strength, such as Xingsheng commerce.
Risk tips: 1) the short-term fluctuation of the real estate industry exceeds the expected risk; 2) The fermentation and chain reaction of individual real estate enterprises’ liquidity problems exceed the expected risks; 3) The timeliness of policy improvement is lower than the expected risk.
