This report analyzes what policy tools can be used on the demand side and how they may be used under the current market environment. We believe that sales recovery is the starting point for solving a series of problems in the real estate market, and March 2022 will become a window period with more intensive policies.
The adjustment of the real estate market has brought many problems, and the sales recovery is the starting point to solve these problems. We believe that the continuous decline of house prices and the continuous adjustment of sales will bring many challenges, including enterprise credit, house delivery, government fund income, the survival of upstream and downstream enterprises in the industrial chain and so on. The supply side alone is not enough to solve this problem. Creditors, house buyers and development enterprises cannot maintain the original market order in the zero sum game. We believe that sales recovery is the starting point to solve the problem. Only sales recovery can promote asset revitalization and orderly development. Therefore, we believe that the policy focus in the future is to support the demand in various fields in order to recover the commercial housing transaction.
There is more room for the optimization of differentiated housing credit policies. We believe that we should implement the preferential interest rate for the first set of just in need buyers and speed up lending; In addition to the existing policies, further increase the housing credit support for the first set of rigid demand, especially for foreign residents; Appropriately redefining the first house and treating the improved real estate with the repayment of some urban loans as the treatment of the first house may be the space for the optimization of differentiated housing credit policies in the future. We believe that mortgage interest rates are expected to continue to decline rapidly.
Multiple conditions may promote the structural fine-tuning of price limit. In order to enhance the attractiveness of land transfer, some places have raised the listing price limit of some projects. In the long run, we believe that the price limit of high-end commercial housing may also be gradually opened. The second-hand price limit is the latest regulation policy, which has an immediate effect on the suppression of house prices in the second-hand housing market. We believe that under the background of the significant adjustment of second-hand housing prices in Shenzhen and other places, the transaction control of the second-hand housing market is expected to be weakened and the transaction efficiency is expected to be improved.
Monetized resettlement may enter a new stage. Historically, the monetization of shed reform was an important means to start the demand of low-level cities. We have noticed that Zhengzhou and other places have begun to actively increase monetization resettlement, which is still a good way to digest inventory. Of course, the strength of monetized resettlement in the future also depends on the strength of supporting credit. In addition to the above tools, we believe that there is room for policy adjustment in the areas of purchase restriction standards, ordinary housing recognition standards (transaction tax), talent introduction standards and so on.
Risk warning: we believe that policy inflection point, sales inflection point and credit inflection point will not appear at the same time. Medium and low credit companies are still facing greater risk of table shrinkage.
Seize the policy opportunity period and be optimistic about blue chip developers. Our summary of historical experience shows that the overall performance of A-share real estate companies is highly related to policy trends. We believe that the policy will remain relatively loose for some time in the future and continue to be optimistic about the real estate development sector. We recommend Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Resources Land, Hangzhou Binjiang Real Estate Group Co.Ltd(002244) and green City China.
