At the current stage of rapid changes in expectations, we believe that instead of waiting for the signal of systematic relaxation from top to bottom, we should pay more attention to local practical actions; Rather than tangle with the form of policy relaxation, it is better to rethink the ultimate goal that the policy wants to achieve. It can be seen from Zhengzhou that this round of urban policy has achieved a breakthrough in the autonomy of the purchase and loan restriction policy at the local level. Under the compound demands of steady and healthy development of the industry and steady growth at the macro level, the policy needs to make more reasonable adjustments according to the changes of fundamentals.
The biggest highlight of the new deal lies in the independent breakthrough of local loan restrictions
The general office of Zhengzhou Municipal People’s government issued the notice on promoting the virtuous circle and healthy development of the real estate industry. The highlights of this policy are as follows: 1. Break through the restrictions on house and loan recognition, and reduce the minimum down payment proportion of households with and without loans to 30% (the original notice on matters related to further improving the personal housing loan business in the purchase restricted area of Zhengzhou on December 23, 2016 recognized houses and loans, and the down payment of two sets was 60%); 2. Speed up mortgage supply and interest rate reduction; 3. A new house can be purchased for the elderly; 4. Implement monetized resettlement; 5. The price limit of high-quality housing rises; 6. Encourage the extension and renewal of loans to troubled enterprises; 7. The minimum land deposit shall be reduced to 20%, which can be paid in installments within one year.
Housing and loan recognition is expected to begin to improve the market
Previously, in Tianfeng Q & a series: what positive changes have taken place in policies? — rebalancing of deleveraging, risk control and steady growth (January 24), we took the lead in fulfilling the “referring to the adjustment direction of provident fund policies in some cities, the housing and loan recognition standard of commercial loans can not be relaxed, and moderately support the release of reasonably improved demand” in Zhengzhou. Since the beginning of the year, the adjustment of down payment and mortgage ratio in some cities is more targeted at the first set of rigid demand. On February 24, the state information office promoted the high-quality development of housing and urban and rural construction, and proposed to “meet the reasonable demand for improved housing”. We believe that the improved demand is highly sensitive to the loan restriction policy and is expected to release greater flexibility under the adjustment of the standard of house and loan recognition.
The relaxation of price limit is expected to play a price guiding role
The experience of the past few cycles shows that the role of real estate prices in guiding market expectations is strong. This time, the price limit of high-quality housing is allowed to rise. We believe that it is expected to achieve the expected improvement through the price rise effect of some projects. At the same time, it is expected to cooperate with the relaxation of housing and loan recognition standards, the improvement of mortgage interest rates, the relaxation of restrictions on the purchase of relatives and elderly care, and the optimization of taxes and fees for second-hand housing transactions (on February 15, the mayor of Zhengzhou said at the economic work meeting of the municipal Party committee that “he plans to reduce the personal income tax on second-hand housing, Activate the replacement transaction effect of the whole regional market echelon.
Confidence recovery requires both supply and demand
On the one hand, the new regulations encourage financial institutions to extend and renew loans to troubled enterprises and increase the support of M & A loans; On the other hand, it is proposed that the minimum land deposit be reduced to 20%, which can be paid in installments within one year. We believe that although the current industry fundamentals and credit problems point to the demand side, the liquidity run on the supply side and the lack of investment confidence also need the strength of enterprise level support measures. The public statement of the local government on the financing of troubled enterprises is expected to alleviate the pessimistic expectations of financial institutions. At the same time, the moderate profit transfer of the government is expected to promote the recovery of the land market.
The ultimate goal of the policy is the steady and healthy development of the industry
We believe that the supply side reform is conducive to the establishment of a truly stable and healthy development period of the industry, and will still be the main path to solve the problems of the industry in the future. However, whether it is market-oriented M & A or the restart of the virtuous circle of the industry, it needs confidence repair and expected stability. The focus of real estate policy is expected to rebalance between deleveraging, risk control and steady growth. In particular, with the increasing downward pressure on fundamentals in the first quarter, local policies need to further match the local fundamentals due to the scale of urban implementation. We are expected to see more adjustments in administrative regulation until the real estate fundamentals are out of stall risk.
Grasp the beta of loose policy structure and the alpha of M & A
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) etc; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Xuhui holding, etc; 3) Quality property management: Country Garden service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng service, etc.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation remained high-pressure, and the pilot strength of real estate tax exceeded expectations
