Event: the National Bureau of statistics released the statistical data of the national real estate development industry from January to February 2022, and the investment in real estate development increased by 3.7% year-on-year; The sales of commercial housing decreased by 19.9% and 17.7% year-on-year respectively.
From January to February, the downward trend of industry prosperity slowed down, the growth rate of real estate investment decreased slightly, the sales price fell together, the growth rate of construction narrowed, the decline of new construction expanded, the growth rate of completion turned negative, and the deposit and advance collection in the funds in place decreased by nearly 30%.
The year-on-year growth rate of real estate investment decreased slightly compared with the whole year of 2021: from January to February, the cumulative investment in national real estate development was 1.45 trillion yuan, with a year-on-year increase of 3.7%, and the growth rate decreased by 0.7 percentage points compared with the whole year of 2021. Real estate investment is growing, reflecting the strong resilience of the industry. However, the market prosperity is still in a downward trend, and the funds in place have decreased by nearly 20%. The insufficient land acquisition ability of real estate enterprises and the decline of new construction intention have dragged down the growth rate of real estate investment.
The sales price continued to fall: from January to February, the sales area of newly-built commercial housing in China was 157 million m2, and the sales volume was 1.55 trillion yuan, with a year-on-year decrease of 9.6% and 19.3% respectively, and the growth rate decreased by 11.5 and 24.1 percentage points respectively compared with the whole year of 2021. The average sales price was 9845 yuan / m2, a year-on-year decrease of 10.7%.
In a single month, the sales area of commercial housing increased negatively year-on-year for 8 consecutive months, but the decline narrowed; The average selling price fell for six consecutive months. Housing has the dual attributes of consumption and investment. We believe that the continuous decline of the market is mainly due to the further deterioration of buyers’ expectations and weak demand caused by the decline of average sales price.
The growth rate of construction narrowed, the decline rate of new construction expanded, and the growth rate of completion turned negative: from January to February, the cumulative housing construction area in China was 7.845 billion m2, a year-on-year increase of 1.8%, and the growth rate narrowed by 3.4 percentage points compared with the whole year of 2021. From January to February, the cumulative new construction area of houses was 150 million m2, a year-on-year decrease of 12.1%, and the decline was 0.7 percentage points higher than that of the previous month. From January to February, the total completed area of houses was 122 million m2, a year-on-year decrease of 9.8%, and the growth rate was 21.0 percentage points lower than that of 2021. We believe that under the market environment of downward sales, the reduction of new construction area is mainly due to the poor sales collection of real estate enterprises and the decline of land acquisition ability; On the other hand, if the new construction cannot be converted into sales, the investment in construction and installation will further increase the pressure of enterprise cash flow, and the willingness of real estate enterprises with the ability to obtain land to start construction is also weak. Therefore, improving market demand is the core of solving the negative feedback problem of insufficient supply and downward demand.
The growth rate of sales and mortgage collection decreased: from January to February, the total amount of real estate funds in place in China was 2.51 trillion yuan, a year-on-year decrease of 17.7%, and the growth rate decreased by 21.9 percentage points compared with the whole year of 2021. Among other funds, deposits and advance receipts decreased by 27.0% year-on-year, and the growth rate decreased by 38.1 percentage points month on month; Personal mortgage loans decreased by 16.9% year-on-year, and the growth rate decreased by 24.9 percentage points month on month.
In the capital structure in place, the cumulative year-on-year growth rate of deposits and advance receipts has changed from positive to negative, indicating that the downward trend of demand has not stopped, real estate enterprises cut prices for sales, and consumers tend to wait and see with money. The cumulative year-on-year growth rate of personal mortgage loans has also changed from positive to negative, which explains that the decline in mortgage interest rates in some cities is due to insufficient demand in the credit market.
Investment suggestion: we believe that the policy is in the process of continuous improvement under the goal of stable growth. Three main lines are recommended: 1) leading real estate enterprises under the structural differentiation of financing environment: Green City China, Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) ; 2) Regional deep ploughing private enterprises: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ; 3) High rated and stable private enterprise: Xuhui holding group.
Risk warning events: the tightening of financing environment exceeds expectations, the tightening of real estate policies exceeds expectations, and the quoted data lags behind or is not timely
