Industry comments
This week, real estate a, H shares and property sectors showed differentiation. This week, Shenwan A-share real estate sector rose or fell by + 3.8%, ranking second among all sectors; Wind Hong Kong stocks and real estate sector rose or fell by – 1.2%, ranking 14th among all sectors. This week, the Hang Seng property service and management index rose or fell by – 3.4%, the Hang Seng China enterprise index rose or fell by – 1.1%, and the Shanghai and Shenzhen 300 index rose or fell by – 2.1%; The relative returns of the property index to Hang Seng China enterprise index and CSI 300 were – 2.3% and – 1.3% respectively.
Local auction market heat remained relatively low. This week, 3.8 million square meters of residential land was sold in 300 cities across the country, with a month on week ratio of – 47% (the number of cities with centralized local auction decreased), a year-on-year ratio of – 61% and an average premium rate of 6%. Since the beginning of 2022, a total of 83.18 million square meters of residential land has been sold in 300 cities across the country, with a cumulative year-on-year increase of – 56%.
On Monday, hand house sales rebounded month on month and decreased year on year. This week, commercial housing transactions in 40 cities totaled 3.91 million square meters, with a week-on-week ratio of + 8% and a week-on-week ratio of – 48%, including a week-on-week ratio of + 35% and a week-on-week ratio of – 23% in first tier cities; Second tier cities + 9% QoQ and – 48% YoY; The third and fourth tier cities recorded – 28% mom and – 70% yoy.
Second hand housing sales fell month on month and year-on-year this week. Second hand housing transactions in 17 cities totaled 1.11 million square meters this week, with a week-on-week ratio of – 14% and a week-on-year ratio of – 51%, including + 17% and – 32% in first tier cities; Second tier cities – 26% mom and – 55% YoY; The third and fourth tier cities recorded – 2% mom and – 78% yoy.
The warmth on the credit side continued to release, and the mortgage interest rate continued to decline. ① The mortgage interest rate of Baicheng continued to decline. In March 2022, the first mortgage interest rate of Baicheng was 5.34%, down 13bp month on month, the largest decline since 2019. The interest rate of the second house in Baicheng was 5.60%, down 15bp month on month; The lending cycle was accelerated. In March 2022, the average lending cycle of 100 cities was 34 days, down 4 days month on month. ② The mortgage interest rates of Suzhou, Nanjing, Xiangyang, Shiyan and other cities with different energy levels have been reduced. Among them, the interest rate of the first house in Suzhou has been reduced to 4.6-4.7%, which is basically consistent with the LPR interest rate of 5 years and above. The mortgage interest rates of Xiangyang and Shiyan have been reduced by 40-45bp. The reduction of mortgage interest rate is conducive to stimulating the release of house purchase demand.
The first and second tier sales have gradually stabilized, and the third and fourth tier sales still need support. Recently, the policy has been favorable, and the market of high-energy cities took the lead in responding. This week, the sales area of commercial housing in first tier cities increased by 35% month on month. In addition to the decline in sales in Shanghai affected by the epidemic, Beijing, Guangzhou and Shenzhen have increased significantly, of which Shenzhen has exceeded the level in the same period last year; Affected by the epidemic, the sales area of commercial housing in second tier cities showed differentiation, but the overall month on month increase was 9%; The demand in the third and fourth tier cities is still relatively low, and the sales area of commercial housing is – 28% month on month. It is urgent for multi-dimensional policy support to promote the healthy development and virtuous circle of the real estate market.
Investment advice
We believe that in the future, more policies and measures for coordinated efforts between supply and demand will be implemented, and the credit environment will continue to improve. In the real estate sector, we are optimistic about green city China, China Construction Development International and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . In the property sector, we believe that private property companies have greater flexibility after the liquidity crisis of related real estate enterprises is lifted, and recommend Jinke service and country garden service.
Risk tips
Loose regulation is less than expected; The epidemic continues to affect market sales
