Core view
New houses: the overall market remains depressed. It is expected that high-energy cities are expected to take the lead in stabilizing in the middle and late second quarter. The transaction area of new houses in 46 cities was 16.055 million square meters, an increase of 22.6% month on month and a year-on-year decrease of 49.1%, an increase of 18.2 percentage points over the previous month. 1、 The month on month growth rates of the second and third tier cities were + 2.9%, + 33.1% and + 65.1% respectively, and the year-on-year growth rates were - 46.5%, - 44.7% and - 58.7% respectively. We expect that sales in April will remain low, and the end of the market may come in the middle and late second quarter. Transactions in May and June are expected to stabilize, and the year-on-year decline will also narrow. However, the market differentiation of various cities may intensify: the first and second tier cities are expected to take the lead in stabilizing, and it will take a long time for the third and fourth tier cities to stabilize.
Second hand housing: the transaction scale increased month on month, with a year-on-year decline, and the market has not improved significantly. The transaction area of second-hand houses in 16 cities was 5.112 million square meters, an increase of 77.9% month on month and a year-on-year decrease of 42.0%, an increase of 1.4 percentage points over the previous month. 1、 The month on month growth rates of the second and third tier cities were + 83.4%, + 73.1% and + 64.5% respectively, and the year-on-year growth rates were - 40.0%, - 34.5% and - 75.4% respectively. 12. All cities in the city showed a month on month increase in varying degrees, with a month on month increase of more than 70% of cities exceeding 30%; On a year-on-year basis, most of the 12 cities fell, and only Chengdu rebounded year-on-year.
The overall inventory and decontamination cycle increased month on month. As of March 31, the inventory area of new houses in 14 cities was 102501 million square meters, a month on month increase of + 0.2% and a year-on-year increase of + 4.3%; The decontamination cycle was 12.7 months, with a month on month increase of + 5.2% and a year-on-year increase of + 40.3%. 1、 The month on month growth rates of inventory area in the second and third tier cities were 0.0%, + 0.9% and - 1.5% respectively, and the year-on-year growth rates were + 7.7%, - 0.9% and + 12.6% respectively; The decontamination cycle was 9.6 months, 11.2 months and 15.9 months respectively, with a month on month growth rate of + 5.3%, + 6.0% and + 2.6% respectively, and a year-on-year growth rate of + 40.2%, + 10.9% and + 58.1% respectively. Due to the sluggish transaction on schedule, the de urbanization cycle of more than 80% of cities has been lengthened, and more than 30% are still within 12 months. Restricted by insufficient supply, the inventory area was basically the same as that at the end of February; However, the market confidence is still relatively pessimistic. Due to the repeated epidemic, the property market in many cities has not yet warmed up, and the transaction of new houses in many cities is still at a historical low. Therefore, the inventory area is basically flat month on month, but the decontamination cycle is still significantly prolonged.
Sales of real estate enterprises: in March, the real estate market continued the downward adjustment trend, and the overall transaction of the market showed no obvious signs of warming. The year-on-year decline of sales of top 100 real estate enterprises was further expanded compared with that in February. The top 100 real estate enterprises only realized 383.4 billion yuan of equity sales, a year-on-year increase of - 55.5% (the previous value was - 48.4%). In March, the new real estate enterprises on the top 20 list were: Huafa Industrial Co.Ltd.Zhuhai(600325) . The monthly sales of all top 20 real estate enterprises fell by different ranges year-on-year. The sales performance of most large-scale real estate enterprises is poor. At present, there is a trend of improvement in policy, but the sales remain depressed and the market confidence is insufficient in the short term.
Land market: 1) the volume of land transactions decreased significantly, and the construction area of land transactions in Baicheng was - 62.8% year-on-year; 2) The overall average floor price of land transactions in Baicheng was - 13.2% year-on-year. Affected by the first round of centralized land auction, the transaction unit price in second tier cities increased month on month in March; 3) The heat of the land market is still low, and the heat of the second and third tier cities has warmed up slightly. In March, the land premium rate of 100 cities was only 3.1%, of which the land premium rates of second and third tier cities were 4.2% and 3.6% respectively, an increase of 0.9 and 1.4 percentage points month on month. Compared with the performance of the first round of soil photography in the four cities, the return temperature of soil photography in Hefei and Xiamen is obvious; The heat of Qingdao soil auction is relatively stable; Fuzhou is relatively cold. One third of the plots are sold, and most of them are still supported by local state-owned enterprises.
Policy: the policy of March can be summarized as 1) the two sessions emphasize supporting reasonable housing demand and promoting a virtuous circle of the real estate industry due to urban implementation; 2) Many ministries and commissions have made positive statements to boost market confidence; 3) Due to the implementation of policies in many cities, we have issued policies to moderately relax the regulation and control of real estate. At present, under the background that the market prosperity is still declining and China's epidemic situation is repeated, the downward pressure on China's economy is still large. "Stable growth" has become the top priority of economic work this year. Whether from the perspective of stabilizing the economy or preventing risks, the stability of real estate this year is very important. Therefore, it is expected that the policies to stabilize the real estate market in the second quarter will continue to be issued: 1) in terms of monetary policy, it is expected to continue to reduce reserve requirements and interest rates in the second quarter, and the real estate industry will also benefit from it; 2) Enterprises should strengthen the rescue efforts of real estate enterprises, support the reasonable financing needs of real estate enterprises, support high-quality enterprises to carry out M & a loan financing, continue the maturity debt, issue M & A bills, etc., and accelerate the orderly liquidation of the industry; 3) The demand side increased credit support, appropriately revised the "four limits" and other policies according to local conditions, and promoted the recovery of sales.
Investment advice
Although the supply and demand side policies have been adjusted continuously since this year, the prosperity of the real estate market is still low, and there is no obvious sign of warming in new house transactions. In March, the year-on-year decline in sales of the top 100 real estate enterprises was further expanded compared with February. At present, it is still the logic of poor fundamentals and game policy. The sudden increase of the epidemic has seriously affected the transaction of new houses around the country. There is great pressure on the annual growth target, and the introduction of policies is imminent. It is suggested to pay attention to the policy follow-up of Chengdu, Xiamen, Wuhan, Hangzhou and other strong second tier cities with relatively higher energy level. From the perspective of sector investment, we believe that April is still a good allocation window period, and the expectation of policy improvement is still strengthened. It is suggested to continue to pay attention to the opportunities of the real estate sector. We suggest paying attention to four main lines: 1) leading real estate enterprises with low credit risk, smooth financing channels and high security: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) , Longhu group and China Resources Land. 2) Regional central state-owned enterprises or regional leading private enterprises with high financial report security and stable cash flow: China Construction Development International, Yuexiu real estate, Midea real estate, Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . 3) Under the influence of macro and industrial policies such as interest rate reduction, elastic real estate enterprises with large marginal income: Xuhui holding group, Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) . 4) At present, the real estate post cycle property sector with strong income determination and accelerated concentration, as well as the recent credit risk mitigation of related real estate enterprises and elastic reversal: Country Garden service, Xuhui Yongsheng life, poly property, Zhonghai property and xinchengyue service.
Risk tips
Real estate regulation continues to upgrade; Sales fell more than expected; Financing continued to tighten.
