Core view of this week: all localities continue to reduce the down payment ratio and loan interest rate. At the same time, many regions put forward to take affordable rental housing as the key task of housing construction. The CSRC also proposed to study and promote the pilot work of affordable rental housing REITs and promote the project site as soon as possible. On the whole, the policy level continues to be good. The trading volume and price of new houses rose this week, and the year-on-year decline has narrowed. Second hand houses have not improved significantly. Due to the epidemic, the recovery speed is not as fast as expected. At present, new houses and second-hand houses in first tier cities take the lead in the recovery. It is expected that the recovery trend will be transmitted to second tier cities after the introduction of favorable policies in second tier cities. As the first provincial capital city to lift the restrictions on sales, the loan interest rates in Nanjing and Suzhou decreased, indicating that the urban energy level of urban policy implementation is gradually improving, which is conducive to further boost market confidence, and the industry fundamentals are expected to hit the bottom and rise.
Key policy analysis: in July 2021, the national development and Reform Commission issued the notice on further improving the pilot work of real estate investment trusts (REITs) in the field of infrastructure, which included the affordable rental housing projects of municipalities directly under the central government and large cities with net population inflow into the pilot scope of infrastructure REITs industry. Recently, the CSRC issued a document saying that it will further promote the pilot of public offering REITs (real estate investment trust funds) to further promote a virtuous circle of investment and financing. The CSRC said in the article that it is currently studying and promoting the pilot work of affordable rental housing REITs with relevant ministries and commissions to promote the implementation of the project as soon as possible. This is an effective policy tool to implement the decision-making and deployment of the CPC Central Committee and the State Council on accelerating the establishment of a housing system with multi-body supply, multi-channel guarantee and simultaneous rent and purchase. It is conducive to broadening the source of construction funds for affordable rental housing, better attracting the participation of social capital, promoting the transformation of the industry to a new development model and realizing stable and healthy development. On the one hand, the policy shows the importance the state attaches to affordable rental housing in 2022. On the other hand, it provides support for enterprises to participate in the construction of affordable rental housing, which can further promote the transformation of real estate investment from increment to stock.
One week market review: this week (2022 / 3 / 212022 / 3 / 27), Shenwan real estate rose 3.84%, outperforming the Shanghai Composite Index by 5.04pct, ranking third in all sectors. The Hang Seng real estate construction industry index fell 1.57%, outperforming the Shanghai Composite Index by 0.37pct. The real estate companies with the top three increases this week are: Tianjin Tianbao Infrastructure Co.Ltd(000965) (60.91%), Citychamp Dartong Co.Ltd(600067) (53.25%), Yango Group Co.Ltd(000671) (47.89%). The top three real estate companies that fell this week were Baolong real estate (- 23.91%), E-House enterprise holding (- 21.74%) and rongchuang China (- 19.62%). This week (March 21, 2022-march 27, 2022), the Hang Seng property service and management sector fell 3.4%, underperforming the Shanghai Composite Index by 2.21pct and the Hang Seng China enterprise index by 2.28pct, ranking 26th / 28th among various sectors. The top three companies that rose this week were: Zhonghai property (25.89%), Greentown Management Holdings (11.26%) and Jianfa property (8.96%). The top three companies that fell this week were Baolong Commerce (- 22.88%), Shimao service (- 18.55%) and rongchuang service (- 17.14%).
Real estate market monitoring: from last Saturday to this Friday (2022 / 3 / 192022 / 3 / 25), the transaction area of new houses in 30 large and medium-sized cities was 2105400 square meters, with a month on month increase of 17.8%, a year-on-year decrease of 47.9%, and the decline narrowed. The transaction area of second-hand houses in 16 cities was 1113700 square meters, a month on month decrease of 15.6% and a year-on-year decrease of 44.9%. Last week (March 14, 2022-march 20, 2022), the land supply and construction area of 100 large and medium-sized cities was 18.104 million square meters, a year-on-year decrease of 47.9%, a month-on-month decrease of 43.37%, and the land transaction and construction area was 9.682 million square meters, a year-on-year decrease of 63.1% and a month-on-month decrease of 36.64%. The supply and transaction fell sharply, and the supply-demand ratio fell to 1.87.
Financing of real estate enterprises: this week (2022 / 3 / 212022 / 3 / 27), the total amount of domestic new bonds issued by real estate enterprises was 17.41 billion yuan, a year-on-year decrease of 18% and a month on month increase of 7.12%. In terms of trust issuance, 23 real estate trusts were issued this week, with an issuance scale of 3.599 billion yuan, an increase of 55.87% month on month. The average annual yield is 7.74% and the average term is 1.51 years.
Risk factors: policy risk: the progress of policy relaxation is less than expected. Market risk: the market recovery of the real estate industry is less than expected, and the epidemic control is less than expected.
