The rhythm of real estate investment trend is difficult to distinguish, but the direction is clear
First, the current round of real estate industry risk is the risk release of liquidity problems, not the interpretation of the dislocation of supply and demand cycle. Before the risk deduction in 2021, the commercial housing market itself is in a tight balance between supply and demand, and the inventory and decontamination cycle of commercial housing are relatively stable; After risk deduction, the liquidity problem transits to the dimension of supply and demand, and the tight balance between supply and demand is broken. Therefore, the key to the current round of real estate investment restoration is the restoration of liquidity. Second, liquidity needs to be repaired urgently, and the core lies in the opening of the pre-sale supervision policy. On the one hand, at present, the demand side is constrained by “residents’ willingness to buy houses is dragged down by developers’ liquidity problems, and the leverage ratio of residents’ departments has not experienced periodic test”, while the supply side is constrained by “credit and pre-sale fund supervision”, so the improvement of single branch line is difficult to effectively boost investment, so the dimensions of supply and demand must work together. On the other hand, as far as the pre-sale fund supervision policy itself is concerned, the starting point is goodwill. In order to ensure the delivery of the project, local governments have the motivation to adopt more strict pre-sale supervision, but the local optimal solution is not the global optimal solution. If the tightening of credit policy is the “fuse” of the current round of real estate weakness, the strengthening of the supervision of pre-sale funds in various cities is the “last straw to crush the liquidity of real estate enterprises”. The pre-sale funds (including mortgage) account for more than half of the capital sources of real estate enterprises. After the tightening of the policy, a large amount of funds of developers cannot be revitalized. Therefore, we must look forward to the liberalization of the mode, withdrawal proportion or withdrawal method of follow-up pre-sale supervision. Third, the follow-up trend rhythm of real estate investment is difficult to distinguish, but the direction is clear. We judge that the inflection point of real estate will certainly appear. Under the established economic goal of steady growth, it is necessary for real estate investment to rebound. Similar to infrastructure construction in 2018, this round of steady growth is steady real estate. However, the rhythm depends on the policy. After clarifying the direction, do not try to guess the time point.
At present, the demand and development cycle are still bottomed out
In terms of demand, the sales of commercial housing market improved in the penultimate week of March, but the house price confidence is still weak. In terms of development cycle, the operation of main building materials is poor. In terms of volume, the operation rate of blast furnace decreased slightly this week, and the cement delivery rate in East China and Central South China has decreased significantly since late March; In terms of price, the prices of cement and flat glass have fallen. As the policy is intended to ensure the delivery of projects, not the guarantee of enterprises, let alone the guarantee of cash. At the same time, the current real estate industry is facing deleveraging, the periodicity of subsequent real estate will gradually disappear, and a large number of enterprises will clear out or even default. Therefore, we suggest to control the position of real estate bonds and give priority to the allocation of high-quality state-owned enterprises and leading private real estate companies with good operation ability, with a period of 1-2 years. two
Default of low-grade real estate bonds occurred frequently, and the ratings of many entities were downgraded
In terms of default and rating change, 18 Fujian sunshine mtn001 had cross default, 21 Fujian sunshine scp001, 19 Yango Group Co.Ltd(000671) ppn001 and 17 Huayang 01 failed to pay the principal and interest on time, and the default bond rating was BBB or below. The extension of three bonds of Guangdong Province (20 Shenju D1, 21 Xinli 01, 18 longkong 02) and 19 Nantong Sanjian mtn001 of Jiangsu Province. Rongchuang real estate, Xinpu, Guizhou, Yaxi Dadi, Zunyi, Rongxin (Fujian) investment, Guangzhou Times Holdings, Xiangsheng real estate and other entities’ implicit ratings of Chinese bonds were lowered.
The issuance scale of real estate bonds is relatively stable, with interest rate spread and yield differentiation
The total issuance of real estate bonds this week was 15.764 billion yuan, basically the same as last week, with a net financing of 2.292 billion yuan, a year-on-year decrease of 13.44%. In terms of credit spread, in the past two weeks, the median credit spread of AAA and AA real estate bonds has declined, the spread of AA + real estate bonds has widened, both AA + and AA grades are below the historical 25th quantile, and AAA grade is near the historical median. In terms of YTM, except for AA real estate bonds, the yields rose, of which the changes of AA + and other categories reached 1054bp and 2188bp respectively, which was mainly caused by the valuation fluctuations of some bonds issued by R & F real estate, Evergrande, happy foundation and other entities.
Rectifying the deviation of real estate policy and promoting the virtuous circle of real estate
Registered residence policy, registered residence registered residence in Fuzhou, Changle registered residence in Fuzhou, allowing it to buy houses in Fuzhou five cities, while relaxing the five urban housing purchase restrictions, Foshan to reduce the threshold of talent card application; In terms of credit and fiscal and tax policies, Guangdong emphasizes meeting the reasonable demand for house purchase and increasing financial support, and gives reasonable relief to taxpayers who meet the difficult relief of real estate tax and urban land use tax. Supply side: the Ministry of Finance held a meeting to convey the spirit of the 166th executive meeting of the State Council. The three “shall not be used” to standardize the use of special funds: special funds shall not be used for the construction of government buildings, various image projects, performance projects, land reserves and new projects for the reconstruction of shantytowns. Under the goal of maintaining the stable operation of the real estate market, local policies have been adjusted, and Harbin plans to abolish the notice on strengthening the regulation and control of the real estate market.
The core pricing index that dynamically tracks the demand cycle and development cycle is the key to predict the trend of real estate investment
The main line of subsequent real estate investment restoration is “stable demand + stable development + destocking”. The core pricing index of dynamic tracking demand cycle and development cycle is the key to predict the trend of real estate investment.
First, in terms of demand cycle, at present, the end of multi city demand policy has been realized, but the repair of demand cycle is a slow variable. For investors, to judge whether the chain of “policy bottom → sales bottom” is open, the core needs to pay attention to whether there are signs of repair in two indicators: (1) whether M1 has stabilized and rebounded. M1 is composed of cash in circulation and unit demand deposits, which reflects the liquidity adequacy and capital tightness of residents, enterprises and government departments. It is a “reservoir” of investment and a forward-looking indicator of economic cycle changes. For the real estate chain, the stabilization and recovery of M1 shows two points: first, the residents’ willingness to buy houses at present is increased. Second, the house purchase funds recorded by enterprises are increased. At this time, the demand link and development link will jointly point to the bottom of real estate sales. (2) Whether the sales area of commercial housing has stabilized and rebounded month on month. In the short term, month on month and year-on-year in the long term, the change of sales is ahead of the change of local auction and construction. Commercial housing sales is an important forward-looking indicator of the whole cycle change of real estate. Since M1 is a monthly frequency index, investors should pay more attention to whether there are signs of recovery in high-frequency sales data.
Second, the current Liquidity Dilemma of development links needs to be solved urgently. To judge whether the drag of liquidity on real estate investment has slowed down, the core investors need to pay attention to whether the construction area and the cumulative investment in construction projects have stabilized and rebounded year-on-year. There are two logics: (1) more than 60% of real estate investment consists of construction engineering investment, and construction engineering investment = construction area × The two indicators of unit cost are highly related to the trend of real estate investment. (2) For real estate investment, new construction and land purchase are noise items, and construction and construction projects are confirmatory indicators of frequency and prospective indicators of expectation. As long as the construction can stabilize and recover, the short-term fluctuation of real estate purchase is difficult to reverse the long-term trend of investment. Due to the lack of high-frequency indicators in the data of construction and construction and installation, in the biweekly report, we take the output and price data of main building materials as the proxy scalar of the current real estate construction prosperity, including the delivery rate of cement and cement price index, the operating rate of blast furnace and rebar steel plant and rebar price, etc.
The trading volume of commercial housing first decreased and then increased this month
The sales of commercial housing market improved in the penultimate week of March, but the confidence of house prices is still weak. The trading volume of this month first decreased and then increased. The average transaction area of new houses and second-hand houses in 30 large and medium-sized cities in recent four weeks changed by 2.16 million square meters and 1.17 million square meters respectively, a year-on-year decrease of 48% and 40.45%.
The poor sales data in the first two weeks of March dragged down the trading volume of the whole month, but it began to improve in the penultimate week, in which the transaction area of new houses in second tier cities rebounded significantly. In terms of price, price growth is generally weak. As of March 28, the Central Plains first-line second-hand housing quotation index had changed by 40.15%, lower than the 50% boundary for five consecutive weeks; The national listing price index of second-hand houses changed by – 0.08%, an increase of 0.03 percentage points over the previous value. It has remained in the negative range since this month, but the decline rate decreased slightly in the next two weeks.
The development and construction has not been significantly boosted
The commencement of main building materials is different. The operation rate of rebar steel plant is flat this week, with a value of 55. It has improved as a whole in March. The operating rate of blast furnace decreased slightly to 77.45 this week. The cement delivery rate in East China and Central South China has decreased significantly since late March. As of March 25, the value was 45.40, 18.24 lower than the previous week. Price differentiation also occurred. The rebar price index continued the recent upward trend, breaking through 5000 yuan / ton this week and reaching 5142 yuan / ton as of April 2. The prices of cement and flat glass fell to 176.50 yuan / ton and 224960 yuan / ton respectively. In terms of commercial housing inventory, the number of months of de inventory of commercial housing in ten cities reached a new high of 15.41. Since this month, the intensity of de inventory of commercial housing has continued to be high. Against the background of destocking, the saleable area of commercial houses in ten cities decreased this week to 85.08 million square meters, an increase of 2% year-on-year and a decrease of 7 percentage points compared with the previous value.
Land transaction differentiation between cities
In recent four weeks, the average transaction and supply land area of 100 cities decreased slightly, including 166642 million square meters of supply land and 8.5617 million square meters of transaction. There is differentiation among cities, with a slight increase in first tier cities and a decline in second and third tier cities. The differentiation of land prices in different cities has intensified. The average transaction price of land in second tier cities in recent four weeks has risen to 503994 yuan / m2, with a premium rate of 4%; The average land transaction price in the past four weeks in the third tier cities decreased slightly to 130221 yuan / m2, with a premium rate of 4.24%.
