Main points
Residential development: equity leverage leveraging soil storage fulcrum under improved liquidity
The new construction is slightly weak and the completion cycle can be expected. From January to October 2021, the newly started area of commercial housing in China was 1.235 billion square meters, with a cumulative year-on-year decrease of 6.80%, and the completed area of commercial housing in China was 414 million square meters, with a cumulative year-on-year increase of 16.90%. Looking forward to 2022, we expect that with the gradual improvement of the credit environment, the data of the completed area of real estate will still have some support, but the data of new construction and construction area are expected to be limited due to the superposition of factors such as increased competition in the market environment and cooling of the sales market.
In the second half of the year, the national commercial housing sales dropped significantly. In the first half of the year, the overall sales of commercial housing in China improved. In 2021h1, the cumulative year-on-year growth of commercial housing in China was 29.40%. In the second half of the year, with the contraction of liquidity and the occurrence of credit risk events in some real estate enterprises, the market wait-and-see mood increased significantly, and the speed of sales deconvolution slowed down. In October, the sales area of commercial housing in China was 110 million square meters, a year-on-year decrease of 24.11%.
The second and third batches of land supply in the local auction market turn cold, and the participation enthusiasm of private enterprises is not high. Since most of the first batch of centralized land supply projects can be opened within the year, which will have a certain impact on the later sales and cash collection, most cities with the first batch of centralized land supply are hot. With the change of market environment, the second batch of centralized land supply has cooled significantly compared with the first batch, and the participation enthusiasm of private enterprises is not high. The third batch of centralized land supply has been started in some cities, but the transaction heat is still not high. Looking forward to 2022, with the improvement of credit environment, the first batch of centralized land supply real estate enterprises still need to replenish inventory next year, and the land market is expected to improve marginally.
The improvement of policy environment is the first to promote a virtuous circle in the real estate industry. In the second half of the year, real estate sales, land acquisition and financing showed varying degrees of cooling, and relevant departments paid close attention to and actively spoke. In December, the central economic work conference mentioned strengthening the expected guidance, exploring new development models, supporting the commercial housing market to better meet the reasonable housing needs of buyers, and promoting a virtuous cycle of the real estate industry due to urban policies.
Agent construction: with the increase of market pressure, the demand of agent construction industry opens up
As an important means for brand developers to operate and empower the market, under the normal regulation of real estate, small and medium-sized developers have increased their demand for commercial agent construction, and brand developers endorse their quality to enhance market confidence; In terms of government agency construction, affordable rental housing has ushered in new development opportunities, and the demand is expected to further improve.
Related subject matter
Under the recovery of policy margin, real estate enterprises with the advantages of financing land acquisition and diversified business development may benefit. Related subjects: low interest rate financing cost Land acquisition China Vanke Co.Ltd(000002) (00000 2. SZ), Poly Developments And Holdings Group Co.Ltd(600048) (600048. SH) and Greentown China (3900. HK) can be continued in the first and second tier cities; real estate enterprises Seazen Holdings Co.Ltd(601155) (601155. SH) and Baolong real estate (1238. HK), which are less affected by the "two concentration" land policy and have strong land acquisition ability, have gradually opened up the market demand for agent construction under the increasing market pressure, and the relevant target: Greentown Management Holdings (9979. HK), Zhongyuan Jianye (9982. HK).
Risk statement
Real estate policy regulation exceeded expectations; The sales of commercial houses are less than expected; The growth of agent construction orders was lower than expected.
