Key investment points
Local regulation policies continued to be loosened and spread rapidly, and demand side policies were adjusted more frequently. Last September, the real estate market ushered in the "policy end". Since 2022, the policy warm wind has been blowing frequently. Nearly 60 cities across the country have relaxed the real estate regulation and control policies. In the early stage, it was mainly the third and fourth tier cities, and now it has been expanded to the hot second tier cities. From the perspective of representative cities, in March, Zhengzhou relaxed the purchase restrictions, and the elderly came to Zhengzhou to join their relatives and provide for the elderly, allowing them to join their families and buy a new set of housing; The loan interest rate of the first and second houses in Wuhan was reduced by about 40 basis points. According to the line, the four first tier cities in Beijing, Shanghai, Guangzhou and Shenzhen mainly lowered the mortgage interest rate following LPR. 17 second tier cities have implemented real estate relaxation policies, including reducing the proportion of down payment, reducing loan interest rates, increasing talent attraction, issuing house purchase subsidies, increasing the amount of provident fund loans and so on. 32 third and fourth tier cities have issued 39 real estate easing policies, focusing on relaxing the conditions of provident fund loans and issuing house purchase subsidies. Among them, 6 third tier cities have reduced the down payment ratio of housing loans. In terms of policy strength, at present, the second and third tier cities frequently release policy signals, the first tier cities have less powerful policy actions, and the real estate has not yet ushered in a large-scale policy east wind. In addition to Shanghai, the recent performance of real estate in first tier cities is still low, and there is more room for policy relaxation. Seven first tier and second tier cities and six third tier cities have a high degree of policy implementation. The loan interest rate is mainly adjusted below the first tier and second tier cities, and the down payment proportion is mainly adjusted below the third tier cities; The 7 second tier and 7 third tier cities with moderate policy implementation are mainly to significantly relax the conditions of provident fund loans; The lower intensity of the policy is 5 second-tier city and 14 three or four city cities, mainly to relax the loan conditions of the provident fund, raise the loan amount of the provident fund, grant housing subsidies and registered residence policy.
Stabilizing the economy requires stabilizing the real estate. The relaxation of real estate regulation and control policies in various places is a defense to achieve the annual economic growth target of 5.5%. In terms of the proportion of GDP, real estate and its industrial chain will account for about 16% of China's GDP in 2020. In terms of investment, real estate development investment accounted for 27.3% of fixed asset investment in 2020. From the perspective of the composition of local fiscal revenue, local governments rely on land finance. In 2020, land transfer revenue and special real estate tax accounted for 37.6% of local fiscal revenue. Real estate is an important pillar of China's economy. Stabilizing the economy requires stabilizing real estate. To achieve an economic growth rate of about 5.5% this year, it is inseparable from the stability of the real estate market.
However, the current degree of policy relaxation is not enough to boost the weak real estate demand, and there are still high expectations for improvement in real estate policy. The current real estate situation is still not optimistic: Residents' enthusiasm for house purchase is weak, real estate enterprises remain cautious in land acquisition, real estate sales investment is still depressed, real estate enterprises' debt risk still exists, superimposed with the rebound of the epidemic and spread beyond expectations. At present, it is still in the game period between insufficient market confidence and policy warming. We believe that the current degree of policy relaxation is not enough to boost the weak real estate demand. If the new housing market wants to get out of the vicious circle of credit, the key lies in the improvement of the supply side; The key to the recovery of second-hand housing lies in the relaxation of the loan and purchase restriction policy. From the perspective of new houses, the credit risk of real estate enterprises is still deteriorating, the industrial chain and demand side expectations, and creditors are not confident in the repayment of real estate enterprises, affecting the supply of new houses; People do not trust the delivery of houses by real estate enterprises, and the enthusiasm for house purchase is still not high. If the supply side risk is not eliminated, the policy effect on the demand side will be limited. From the perspective of second-hand housing, since the price limit policy of second-hand housing loans in most hot cities has not been relaxed, the amount of residents' loans is still limited. Simply reducing the housing loan interest rate has little effect on boosting residents' enthusiasm for buying second-hand housing. At present, the "bottom" of the real estate market has not yet appeared, and we expect this round of policy easing will be further strengthened.
Investment suggestion: in the short term, in the process of promoting the reform of housing supply side structure, increasing the supply of affordable rental housing is the main theme of China in 2022. In the medium and long term, with the contraction of some risk real estate enterprises, the industry pattern will be optimized, and the market share of leading real estate enterprises with financing, operation advantages and abundant liquidity is expected to increase. It is suggested to pay attention to the leading enterprises with high credit in the field of rental housing: Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development, 5I5J Holding Group Co.Ltd(000560) .
Risk tip: the relaxation of real estate regulation policy is less than expected; The industry continued to decline, and the sales were lower than expected; Industry credit risk continues to spread; The epidemic has been repeated and developed beyond expectations.
