Matters:
The central bank and the China Banking and Insurance Regulatory Commission issued the notice on strengthening the financial services of new citizens, clarifying the scope of “new citizens”, proposing to meet the reasonable house purchase credit needs of new citizens, and reasonably determining the standards for the first house mortgage loan of new citizens who meet the house purchase conditions.
In his 2022 government work report, Premier Li Keqiang pointed out that we should adhere to the positioning of “housing, housing and non speculation”, explore a new development model, adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market, promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of buyers, stabilize land prices, house prices and expectations, Implement policies to promote the virtuous circle and healthy development of the real estate industry.
Ping An View:
Economic work should adhere to the word “stability” in the first place, and the intention of “stabilizing real estate” is clear. The 2022 government work report pointed out that “in the face of downward pressure, steady growth should be put in a more prominent position, and the economic target for 2022 is set at about 5.5%. It is clear that” the policy force should be appropriately advanced and the reserve policy tools should be used in time “to strive to stabilize the overall economic market. It is expected that the macro fiscal and monetary policies will continue to be further strengthened, Or provide important support for the steady development of the real estate industry and lay the foundation for the recovery of capital liquidity in the industry. As a pillar industry, the added value of real estate industry will drive the overall economic growth by about 0.38 percentage points in 2021, contributing 4.64% to GDP growth, and real estate investment accounts for 27% of fixed asset investment. Its stable operation is an important support for economic growth; At the same time, the government work report once again emphasizes “stabilizing land prices, housing prices and expectations”, and the intention of “stabilizing real estate” on the policy side is clear.
The general tone of “no speculation in housing and housing” remains unchanged, and the city’s policies promote a virtuous circle. The government work reports from 2020 to 2022 emphasize the positioning of “housing, housing and non speculation”, and the general tone of regulation remains unchanged. However, under the background of the downward pressure of 2021h2 real estate market and the increase of credit risk of some real estate enterprises, this government work report continues the expression of the central economic work conference in 2021, and emphasizes supporting the commercial housing market to better meet the reasonable housing needs of buyers and promoting the virtuous circle and healthy development of the real estate industry due to urban measures. Recently, Zhengzhou and other core cities have introduced new policies to stabilize the property market, but the confidence of market players is still insufficient, and the overall property market transaction has not improved. Subsequently, under the policy guidance of “promoting the virtuous cycle and healthy development of the real estate industry through urban policies”, it is expected that after the “two sessions”, the pace of urban policies may be accelerated to promote the recovery of confidence on the demand side.
Support new citizens’ reasonable demand for house purchase credit, and the policy side space is expected to increase. The CIRC and the central bank issued a notice, emphasizing that “the implementation of the differentiated housing credit policy by the city strategy, the reasonable determination of the first housing mortgage loan standards for new citizens in line with the purchase conditions, the improvement of the loan and repayment convenience” and so on, combined with the recent Chairman Guo Shuqing’s statement that the real estate bubble financial momentum has been fundamentally reversed. It is expected that the follow-up housing credit support is expected to be further increased. The new citizens mainly refer to the various groups who have come to the cities for permanent residence because of their employment, their children’s schooling and their children’s support. They are not eligible for local registered residence or have registered residence for three years, including but not limited to migrant workers, new graduates and so on. There are about three hundred million people in the front. The accelerated release of potential house purchase demand can also provide some support for the current real estate market. Meanwhile, some cities purchase restriction policy has no restriction on the non registered residence population or the city group who has not reached a certain age limit. With the introduction of this policy, some city policies will be fine tuned.
Increase support for affordable rental housing and resolve potential risks in a market-oriented and legal way: the government work report once again mentioned “accelerating the development of affordable rental housing”, “adhering to the simultaneous development of rental and purchase, accelerating the development of long-term rental housing market and promoting the construction of affordable housing”. Recently, affordable rental housing has been mentioned in many important meetings and documents of the Central Committee, Fully reflect the importance of affordable rental housing, and the development of affordable rental housing has become an important part of housing system construction. Many cities have released the raising plan of affordable rental housing during the 14th Five Year Plan period. 40 key cities across the country plan to raise 6.5 million affordable rental housing units, of which 2.4 million units are planned to be raised in 2022. The notice of the CBRC and the central bank also mentioned to support the participation of bank insurance institutions in promoting the increase of long-term rental housing supply, Support commercial banks to provide credit support for professional and large-scale housing rental enterprises in accordance with the law, reduce the capital cost of housing rental enterprises, and help alleviate the housing pressure of new citizens. The introduction of financial support policies may drive the participation enthusiasm of market-oriented subjects, and further improve the supporting policies related to affordable rental housing. At the same time, the government work report also emphasizes that the establishment of a financial stability guarantee fund and the use of market-oriented and legalized methods to resolve potential risks also lay the foundation for the resolution of credit risks of some real estate enterprises at present.
Investment suggestion: Although the policy tone has gradually warmed up since September 2021, the transaction of the real estate market and the capital side of real estate enterprises are still under pressure. The government work report made it clear that the economy is “stable”. It is expected that after the “two sessions”, the pace of urban implementation may be accelerated. In the follow-up, 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 be repaired. 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.
