Market performance:
The Shanghai Composite Index fell to – 1.77% this week, closing at 325107; Gem means + 1.81% this week, closing at 271379 points; CSI 300 – 0.94% this week, closing at 426590. The real estate sector + 1.98%, ranking first among 31 industries.
New house transaction: the transaction area was – 56.9% year-on-year and – 9.1% month on month
This week (March 11-march 17), the total transaction area of first-hand houses in 32 cities we focus on tracking is about 1.83 million square meters, with a year-on-year increase of – 56.9% and a month-on-month increase of – 9.1%. Among them, the total transaction area of first-hand houses in the first tier (4 cities) was 480000 m3, with a year-on-year increase of – 46.1% and a month on month increase of – 3.6%; The total transaction area of first-hand houses in the second tier (14 cities) was 830000 m3, with a year-on-year increase of – 61.7% and a month on month increase of – 12.7%; The total turnover of first-hand houses in the third tier (14 cities) was 510000 m3, with a year-on-year increase of – 56.2% and a month on month increase of – 7.7%.
Second hand housing transactions: the transaction area was – 59.4% year-on-year and – 12.2% month on month
This week (March 11-march 17), the transaction area of second-hand houses in 17 cities we focus on tracking is about 780000 square meters, with a year-on-year increase of – 59.4% and a month on month increase of – 12.2%. Among them, the total transaction area of second-hand houses in the first tier (2 cities) was 320000 square meters, with a year-on-year increase of – 39.9% and a month on month increase of – 8.4%; The total transaction area of second-hand houses in the second tier (8 cities) was 300000 m3, with a year-on-year increase of – 68.9% and a month on month increase of – 22.2%; The total transaction area of second-hand houses in the third tier (7 cities) was 160000 square meters, with a year-on-year increase of – 62.0% and a month on month increase of + 3.5%.
Inventory of new houses: the inventory area is + 0.14% month on month, and the decontamination cycle is 11.1 months
As of March 17, 2022, this week, the total inventory area of new houses in 16 cities we focused on tracking was about 89.87 million m3, a month on month increase of + 0.14%, and the overall decontamination cycle (by area) was about November 1. Among them, the inventory of new houses in the first tier (4 cities) totaled 30.2 million m3, a month on month increase of + 0.36%, and the decontamination cycle was 8.8 months; The inventory of new houses in the second tier (6 cities) was 32.66 million m3, a month on month increase of + 0.27%, and the decontamination cycle was 9.4 months; The inventory of new houses in the third tier (6 cities) was 27.02 million m3, with a month on month ratio of – 0.26%, and the decontamination cycle was 22.6 months.
Land market: the land transaction area of Baicheng is 14.04 million square meters, the total land transaction price is 12 billion yuan, and the land premium rate is 2.10%
Last week (March 07-march 13), the number of land supply in Baicheng was 504, with a corresponding land supply construction area of about 28.02 million m3; The number of land transactions in Baicheng is 172, and the corresponding land construction area is about 14.04 million m3. The total price of land transactions is about 12 billion yuan, and the land premium rate of Baicheng is + 2.10%. Among them, the land transaction and construction area of the first, second and third tier cities were 610000 m3, 5.26 million m3 and 8.17 million m3 respectively, with year-on-year rates of – 76%, – 66% and – 74% respectively, and the corresponding land premium rates were 0.00%, + 2.68% and + 2.60% respectively
Investment suggestions:
This week, the National Bureau of statistics released real estate development investment and sales data from January to February 2022. 1) The sales side is weak, and the follow-up policies and actions of real estate enterprises will be observed. From January to February 2022, the sales area of commercial housing was – 9.6% year-on-year; The sales amount was – 19.3% year-on-year. Among them, the cumulative amount of residential sales was – 22.1% year-on-year. In terms of price, the average national sales price from January to February 2022 was – 10.75% year-on-year. 2) The decline in new construction narrowed, and the completion under “guaranteed delivery” is expected to resume growth. From January to February 2022, the new construction was – 12.2% year-on-year, which was better than – 31.1% year-on-year in December 2021. From the perspective of transmission from land acquisition to commencement, there is a time lag of 2 ~ 3Q between land acquisition and sales. Subdivided to the urban level, the “two concentration of land supply” has significantly disturbed the rhythm of land acquisition. According to Kerui’s statistics, the average time from land acquisition to construction of 22 urban plots with centralized land supply from 2019 to 2020 is 3.7 months; In 2021, after three rounds of centralized land supply, a total of 2111 residential land were sold in 22 cities. As of February 9, 2022, only 21% had been started. The completed area from January to February was – 9.8% year-on-year. Since the end of 2021, the policy of ensuring delivery intensively issued by the government has gradually come into effect, and the completion in 2022 is expected to resume growth. 3) The completed amount of real estate development investment turned positive year-on-year, and the contribution of land investment decreased. From January to February 2022, the completed investment in real estate development was + 3.7% year-on-year (2021 + 4.4%), which was significantly improved compared with – 13.9% year-on-year in December 2021. It is noted that the land transaction and construction area from January to February was – 42.3% year-on-year. 4) Financing is weak, and sales collection is still the main capital channel. From January to February 2022, the funds in place were – 17.7% year-on-year. Structurally, from January to February, China’s loans (year-on-year – 21.1%), self raised funds (year-on-year – 6.2%), payment collection (down payment + mortgage) (year-on-year – 23.9%) [including personal mortgage (year-on-year – 16.9%) and down payment (year-on-year – 27.0%)]. In terms of proportion, sales collection is still the main source of funds (accounting for 50.6% from January to February).
Following the “three red lines”, the introduction of policies such as “real estate loan concentration management” and “two concentration of land supply” will restrict supply and demand in both directions. The regulation of wind direction has not changed, and “stability first” is still the main tone, and the space for large-scale expansion is narrow. At present, the valuation and position of the sector have been at an all-time low. In the future, the low base effect will subside, Q1 fundamentals will be under pressure in 2022, and the supply and demand of the industry will be limited, which will aggravate the disharmony between land acquisition, sales and leverage reduction. Suggestions: (1) steady development type: Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) ; (2) Growth benefit type: Jinke Property Group Co.Ltd(000656) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Seazen Holdings Co.Ltd(601155) ; (3) High quality objects of property management: China Resources Vientiane life, country garden service, Jinke service, Baolong business, etc.
Risk tips:
The real estate regulation policy has become stricter, the sales repair is less than expected, and the capital has been greatly tightened.
