The real estate relaxation may have changed from “policy management” to “result oriented”. The “policy based relaxation due to the city” is under way. It is expected that more cities will join the relaxation list. It does not even rule out the possibility that cities with large pressure on the real estate market will try to moderately surpass the standard level cities for greater relaxation. (1) Real estate relaxation has basically covered all energy-level cities, and more cities are expected to join the relaxation list. Since late February 2022, the real estate policies of cities at all levels in China have been relaxed. The first tier (quasi first tier) cities have mainly adjusted the mortgage interest rate downward, the second tier and strong third tier cities have mainly weakened the “four limits”, and the relaxation of ordinary third and fourth tier cities has focused on reducing the down payment ratio and loan interest rate, showing the characteristics of “the lower the urban energy level, the greater the relaxation scale”. This provides a benchmarking sample for other cities that have not yet relaxed, and it is expected that more cities will join the relaxation list. The “policy based relaxation for cities” is under way. (2) Real estate has relaxed or shifted from “policy management” to “result oriented”. The “Article 19 of Zhengzhou” clearly relaxed the loan restriction and slightly relaxed the purchase restriction, which changed the situation that the previous policy relaxation was limited to “commercial adjustment” without “policy breakthrough”, and then Nanning and Harbin followed up to relax the loan and sales restriction policy. Recently, the relaxation of real estate has less restrictions on policy tools, and the autonomy of local governments to relax real estate has increased significantly, which does not violate the main management requirements of “three stability” or “policy relaxation due to the city”. Under the background of the current downturn in the property market of low and middle-level cities, it is expected that the “policy based relaxation due to the city” is far from over, and it does not rule out the possibility that cities with large pressure on the property market try to moderately surpass the benchmark level cities for greater scale relaxation, but they may be more cautious in completely abolishing the core policies of “purchase and loan restriction”.
Directly benefit two types of real estate stocks. Since October 2021, the liquidity of real estate enterprises has gradually been under pressure, and some real estate enterprises, especially some private real estate enterprises, began to fall into liquidity difficulties. In early November, the central bank took the lead in making a voice, and then various ministries and commissions began to jointly state their positions. The “policy bottom” gradually appeared, but the liquidity pressure of private enterprises was still large. With the increasing pressure surface of real estate enterprises, the overall risk appetite of the market was low. Under the comprehensive effect of “the end of the policy has been realized + the pressure bearing surface has increased”, the large central enterprises represented by Poly Developments And Holdings Group Co.Ltd(600048) are favored by the market, and the real estate stocks of private enterprises mainly rebound in the short term, with a weak overall performance. In this context, the market has doubts about whether the liquidity pressure will further spread to small and medium-sized central enterprises and state-owned enterprises. The overall performance of such real estate stocks is significantly weaker than that of large central enterprises with higher certainty and better fundamental support.
The meeting of the Finance Committee on March 16 clearly put forward the “prevention and resolution of real estate market risks”. The transformation from “individual real estate enterprises” to “market risks” means that more direct and effective governance policies may be on the way. These policies are not only conducive to resolving the liquidity risk of real estate enterprises, but also committed to preventing the risk from spreading to banks, residents and a wider range of real estate enterprises. The former is good for the trapped people’s housing enterprises, while the latter is good for small and medium-sized central enterprises and state-owned enterprises. Relatively speaking, the small and medium-sized central enterprises and state-owned enterprises with fundamental support have high certainty and are expected to get out of the trend opportunities. At present, the trapped civilian housing enterprises are mainly catalyzed by the expected positive, and the transactional characteristics are more certain. Of course, the investment opportunities of central enterprises and state-owned enterprises continue to exist. With the recovery of market risk appetite and the timely introduction of relevant policies, whether real estate is expected to further drive the investment opportunities of relevant industrial chain stocks is also worthy of our attention.
Risk tips: the economy exceeded expectations, the epidemic exceeded expectations, and the policy exceeded expectations.
