Comments on the real estate industry: the purchase and sale restrictions in many cities have been relaxed, and the real estate market has entered a substantial improvement

Matters:

According to the financial union, according to the financial union, from now on, the non five urban households (including Hong Kong, Macao and Taiwan) will purchase houses in five cities of Fuzhou, and do not need to provide medical social security or tax certificates or registered residence in 12 years in the past two years, so that they can purchase an ordinary residential building with less than 144 square meters in Fuzhou, five districts in the city of Fuzhou. Buyers of Changle registered residence can buy two apartments in Fuzhou five districts. In April 1st, the Quzhou Housing Authority issued a document that the registered residence, family businesses, individual businesses and natural persons invested or held the same household policies as the registered residence in the city. New commercial houses in urban areas and new houses of 144 square meters and above that have not been signed online are not limited to sale.

On April 1, Lanzhou municipal government issued a document, including reducing the threshold for individuals to buy housing. The minimum down payment ratio for individuals to purchase the first set of housing through commercial banks and provident fund loans shall not be less than 20%, and the minimum down payment ratio for the second set of housing shall not be less than 30%; For families who own a house and have settled the house purchase loan, if they apply for a loan again to buy a house in order to improve their living conditions, financial institutions implement the first house loan policy, etc.

On April 2, according to the financial Associated Press, Qinhuangdao abolished the "purchase restriction order", saying it was no longer suitable for the current development situation of Qinhuangdao real estate market.

In April 2nd, the Dongguan Housing Authority issued a document to relax the qualification of the purchase of the housing during the epidemic. Since December 2021, the registered residence households and the new registered residence households who are unable to pay social security on time have been affected by the epidemic prevention and control. When they approve the purchase qualification, they will not pay the social security payment during the epidemic prevention and control period as "continuous payment".

Ping An View:

The sales pressure of real estate enterprises has not decreased, and the impact of the epidemic has dragged down the recovery of the property market. Due to the sluggish demand and repeated epidemics, the sales of the top 100 real estate enterprises were further under pressure before the Spring Festival in March. The monthly sales and sales area decreased by 52.6% and 57.2% year-on-year, with a decrease of 6.1 and 14.6 percentage points higher than that in February. Affected by this, the cumulative decline in sales and sales area of the top 100 real estate enterprises in the first quarter expanded to 47.1% and 49.1%. Recently, the multi-point epidemic in Shenzhen, Shanghai and other countries has been more serious, which has dragged down the real estate enterprises to push the supply plan, worsened the recovery of the real estate market, and significantly increased the local financial pressure. Dongguan has issued a document on the suspension of social security payment during the epidemic to relax the qualification of house purchase during the epidemic. As an important pillar industry, real estate must "stabilize real estate" for "stable growth". It is expected that more real estate stability maintenance policies will be introduced in the future.

The regulation of the real estate market has been substantially improved, and the core cities have stepped into the ranks of Deregulation: from more underground mortgage interest rates, loosening the pre-sale supervision fund, loosening the "house and loan recognition" in Zhengzhou, and reducing the down payment ratio in Nanning, the policy improvement has been significantly strengthened. In addition, in March, the financial stability and Development Commission of the State Council and the 2022 government work report set the tone, as well as the positive voice of many ministries and commissions "delaying the expansion of the pilot real estate tax reform this year", more market-friendly policies are being actively introduced. Fuzhou, Quzhou, Qinhuangdao, Lanzhou and other coastal provincial capitals and core metropolitan cities have successively joined the ranks of deregulation of the real estate market, some of which have more directly relaxed purchase and sales restrictions, and the regulation of the real estate market has entered a substantive relaxation stage. Considering the time lag of policy transmission and the impact of the epidemic, it is expected that the repair of the property market will still take time, and the second quarter is an important observation window.

22. The first batch of centralized land supply in the city "make profits", and high-quality real estate enterprises welcome good opportunities for development. Recently, the first batch of land supply in 22 cities optimized the land auction rules and increased the real estate price difference. Most of the radical "high leverage" real estate enterprises withdrew from the land auction. The land market entered the buyer's market of high-quality real estate enterprises, and the implied gross profit margin of land acquisition ushered in improvement. In addition, the willingness of insurance and high-pressure real estate enterprises to transfer assets is quite positive, superimposed with the credit support of financial institutions, creating good acquisition opportunities for high-quality real estate enterprises. In the medium and long term, the industry resources are gradually inclined to high-quality and high credit real estate enterprises, and its market share is expected to continue to expand. At the same time, the market expectations such as policies and local auction are stable, which is conducive to the virtuous circle of the industry and the stable and healthy development of the market.

Investment suggestion: at present, under the background of steady growth, local finance and property market transactions are under pressure. In February, the medium and long-term loans of residents were negative for the first time since statistics. The credit risk of many real estate enterprises broke out again. It is urgent to resolve industry risks and stabilize market expectations. Policies are expected to increase efforts at both ends of supply and demand, driving the continuous repair of sector valuation. In the medium and long term, with the withdrawal or contraction of some real estate enterprises in the painful period of this round, the overall pattern of the industry is expected to be optimized, and the market share and profitability of strong operation and high credit real estate enterprises with financing and control advantages are expected to be improved. The development sector is mainly concerned about: one is the strong operating and high credit enterprises with relaxed short-term benefit policies and improved gross profit margin at the land acquisition end, which are expected to seize market share in the medium and long term, such as Poly Developments And Holdings Group Co.Ltd(600048) , Vanke A, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , etc; One is the subject matter of policy game elasticity with certain support for Fundamentals, such as Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Jinke Property Group Co.Ltd(000656) , etc. The valuation of the property management sector has reached an all-time low, and the downward pressure of the guidance in the middle of the quarter of the annual report has been gradually released. With the continuous deregulation of the policy and the improvement of the capital side of development enterprises, it is expected to bring the valuation repair of high-quality property management enterprises, such as country garden service, poly property, China Merchants Property Operation & Service Co.Ltd(001914) , xinchengyue service, Jinke service, Xingsheng business, etc.

Risk tips: 1) the short-term fluctuation of the real estate industry exceeds the expected risk; 2) The fermentation and chain reaction of individual real estate enterprises' liquidity problems exceed the expected risks; 3) The timeliness of policy improvement is lower than the expected risk.

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