In the first year, the overall market showed a trend of “hot cold stable”. 1) The trading volume showed a downward trend batch by batch, and the average floor price experienced a process of first falling and then rising. In 21 years, three batches of centralized land auctions in 22 cities sold 785 / 581 / 516 pieces of land respectively, with a total amount of 10461 / 6278 / 579.2 billion yuan and a total construction area of 10469 / 6544 / 5696 million square meters. A total of 1882 pieces of land were sold, with a total amount of 2.25 trillion yuan and a total construction area of 22700 square meters. Superimposed on the first batch of plots sold from January to February, the total amount of residential land sold in 22 cities in 21 years was 2.62 trillion yuan, a year-on-year increase of + 3.1%. The average price of three batches of floor is RMB 10169 / 9993 respectively. 2) From the point of view of soil beating heat, it shows a trend process of “heat cold stability”. The land premium rate was 15.3% / 3.6% / 1.9% respectively, the peak transaction rate was 24.2% / 12.4% / 12.6% respectively, and the reserve price transaction rate was 41.6% / 73.5% / 76.7% respectively. From the point of view of the suspended transfer rate and the auction rate, the third batch of centralized local auction market has warmed up, the auction rate has decreased by 0.8pct to 12.5% compared with the second batch, and the suspended transfer rate has decreased from 22.9% to 6.6%. We believe that there are four reasons for the stabilization and recovery of the third batch of centralized land transfer market: a) optimizing the transfer conditions, the government transferring profits, improving the profit space and improving the enthusiasm of real estate enterprises to participate in the auction. b) Macro and meso policies released stability maintenance signals and boosted market confidence. c) The supply of hot sectors and high-quality plots increased significantly. In the third batch, the average proportion of transaction construction in central urban areas increased from 30% in the second batch to 38%. d) After the cooling off period, some real estate enterprises have a strong willingness to replenish inventory. 3) The policy of “loose tight stable” has been continuously adjusted. The threshold and premium of the second batch of funds have been raised, and the threshold and transfer conditions of the third batch of funds have been loosened.
City level: 1) land transfer fees: different from the negative growth (- 13.2%) of land transfer fees in 100 cities, the transfer fees in key cities can still maintain a positive growth of 3.1% in 21 years, and the proportion in 100 cities has increased significantly by 10.7pct to 67.7% compared with 20 years; Among them, the first and second tier cities increased by + 7.3% and + 1.5% year-on-year. The top 5 cities in the Yangtze River Delta and the first tier cities have increased in land transfer fees in 20 years. 2) Trading volume: the trading volume of key cities fell year-on-year, but the Yangtze River Delta and first tier cities are still resilient. The average value of 21 year supply / average transaction volume in the past five years in 22 key cities is 153% (calculated by construction area), which is in line with the policy expectation. Over 70% of the city’s trading volume fell in the past 21 years, and the fundamentals drove the proportion of trading volume in the Yangtze River Delta to 39%. The trading volume of first tier cities was – 8.9% year-on-year, but the proportion in the trading volume of 22 cities increased from 13.2% to 14.7%; Second tier cities – 19.8% year-on-year. 3) Land price: the land price generally rose throughout the year, and the average price of the third batch exceeded 10000. The overall land price of key cities increased by 26.2% in the past 21 years. Only the land price of Jinan was lower than the 20-year level. The average increase of land price of first and second tier cities was 14% and 25%; The average floor price of the third batch of centralized land auction broke 10000, of which the average floor price of more than 40% of the cities still decreased compared with the second batch, mainly in the cities with obvious land price rise in the first two batches. 4) Soil auction heat: the heat of the second batch of centralized soil auction decreased generally, and the heat of a few cities in the third batch rebounded slightly. Among them, the land auction heat of the three batches in Hangzhou and Ningbo has rebounded significantly, mainly driven by factors such as rule adjustment, land price reduction, scarce land supply, new house price limit rise to ensure profit space and so on. 1、 The average premium rate of second tier cities in 21 years was 7.3% and 9.2%, down 6.9 and 4.7 PCT compared with 20 years. 5) Non key cities: the annual trading volume decreased significantly by 40.4%, the increase of land price slowed down significantly, and the decline of premium rate was slightly lower than that of key cities, because key cities strictly controlled the maximum land price and premium rate.
Company level: state-owned enterprises are in charge, urban investment ballast, and the pace of land acquisition by private enterprises has slowed down significantly. The third batch of land auction has three characteristics: 1) the participation of state-owned enterprises in land acquisition has been further improved (the number of land acquisition by the third batch of central state-owned enterprises accounts for 63%), the land acquisition strategy of private enterprises tends to be cautious, and private enterprises with financial strength focus more on high-quality plots; 2) The urban investment platform has actively supported the bottom, and the proportion of land acquisition has increased to 43%. Affected by the change of capital strength and land supply characteristics of local governments, the average land acquisition area and amount of local real estate enterprises are less than those of foreign real estate enterprises; 3) The land acquisition of real estate enterprises in the head is more focused, and the market participation of local small and medium-sized real estate enterprises is improved. The overall land acquisition proportion of top30 real estate enterprises has decreased from 38.9% in the first batch to 10.3% in the third batch. From the perspective of specific real estate enterprises, poly, China Resources and China Shipping ranked among the top three in 21 years with a total land acquisition price of 109.1 billion, 88.9 billion and 86.7 billion respectively. Poly and Longhu have the widest investment layout, and Binjiang and Rongxin pay most attention to deep cultivation in their base camp.
Steady progress may lead to the change trend of land market in 2022. 1) The number of land supply increases to smooth the sharp fluctuations of the market, the heat of centralized land supply will be significantly differentiated, and the land market in first tier cities may take the lead in warming up. From the results of the first batch of centralized land auction in Beijing in 2022, the state-owned enterprises and central enterprises among large-scale real estate enterprises have begun to actively take land, while other cities and real estate enterprises still need some time to repair; 2) It is expected that the overall land acquisition attitude of real estate enterprises is still cautious, and will focus on high-profit and low-risk core cities. Central state-owned enterprises will maintain the main position, and the land acquisition enthusiasm of large-scale real estate enterprises and brand real estate enterprises in cities with strong fundamentals is expected to be improved. At the same time, we believe that in addition to participating in centralized local auction in the open market, some of them intend to accept reserve real estate enterprises or choose institutions to register M & A opportunities; 3) Indemnificatory rental housing has stepped into the incremental acceleration stage; 4) There is room for continuous optimization of the “two concentration” policy in key cities, reducing the threshold for enterprises to obtain land, giving enterprises reasonable profits and stimulating the enthusiasm of real estate enterprises to obtain land is still the main optimization direction.
Investment advice
Compared with the scattered land supply mode for a long time, the centralized land supply has a significant impact on the government’s planned land supply and enterprise decision-making. The long-term mechanism of real estate has been improved through multiple supply side policies. The industry has entered a new stage of development, implemented transparent management from the financing side to the investment side, continued to promote the transformation of the industry to “management and operation driven”, and benefited the leading real estate enterprises with strong comprehensive strength such as capital, market research and judgment, operation management, product power and marketing ability. At present, the industry’s profit margin is down + the sales boom continues to weaken, which has affected the enthusiasm of real estate enterprises to receive and store to a certain extent. However, judging from the sharp decline in the premium rate of the second and third batches of centralized local auction and some policy optimization that the government may make in the future, the expected profit margin of local auction this year will have room for improvement. We believe that it will take some time for the land market and real estate enterprises to recover their attitude towards land acquisition, but it is worth looking forward to the enthusiasm of central state-owned enterprises and brand private enterprises to take the lead in gradually repairing high-quality plots with high profits and low risks. From the perspective of sector investment, we adhere to the view that “the first quarter is a better allocation window period”, and the expectation of policy improvement is still strengthened. It is suggested to continue to pay attention to the opportunities of the real estate sector. We suggest paying attention to three main lines: 1) leading real estate enterprises with low credit risk, smooth financing channels and high security: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) , Longhu group and China Resources Land. 2) Under the influence of macro and industrial policies such as interest rate reduction, elastic real estate enterprises with large marginal income: Xuhui holding group, Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) . 3) At present, the real estate post cycle property sector with strong income determination, accelerated concentration, recent credit risk mitigation of related real estate enterprises and elastic reversal: Country Garden service, Xuhui Yongsheng life and xinchengyue service.
Risk tips
The policy effect is less than expected; Real estate regulation and upgrading; Sales fell more than expected; Financing tightened.
