Key investment points
This week (2022.3.26 – 2022.4.1): the real estate sector (SW) rose and fell by + 10.82%. In the same period, the Shanghai and Shenzhen 300 and wandequan a indexes rose and fell by + 2.43% and + 1.25% respectively, and the excess return was + 8.39% and + 9.57% respectively.
Real estate fundamentals and high-frequency data: (1) real estate market: this week (2022.3.262022.4.1), the transaction area of new houses in 60 cities was 4.05 million square meters, with a month on month increase of + 14.3% and a year-on-year increase of – 50.8%; The cumulative sales of this year was 50.511 million square meters, a year-on-year increase of – 44.0%; In March 2022, the cumulative turnover was 16.631 million square meters, a year-on-year increase of – 51.8%. The transaction area of second-hand houses in 20 cities was 1.135 million square meters, with a month on month increase of + 3.7% and a year-on-year increase of – 46.9%; The cumulative turnover of this year was 13.258 million square meters, a year-on-year increase of – 43.1%; In March 2022, the cumulative turnover was 5.137 million square meters, a year-on-year increase of – 44.5%. The cumulative inventory of new houses in 16 cities was – 10.8% month on month and – 9.2% year on year; The decontamination cycle decreased by 1.1 months month on month. The de urbanization cycle of first tier cities was 7.7 months, down 3.7 months from last week. The de urbanization cycles of second tier and third and fourth tier cities were 16.2 and 27.0 months respectively, up 0.3 and 0.8 months from last week. (2) Land market: this week (March 28, 2022-april 3, 2022), the number of land supplied by 100 cities was – 68.7% month on month, with a year-on-year increase of – 78.6%; The construction area of supplied land was – 64.8% month on month and – 76.4% year-on-year. The construction area of land transaction in Baicheng was – 46.0% month on month and – 74.1% year on year; The transaction floor price was + 82.3% month on month and + 119.4% year on year; The land premium rate was -3.32pct month on month and -21.9pct year on year.
Key policies: since March, the relaxation of real estate has been further strengthened, from the previous reduction of interest rates and relaxation of provident fund to the relaxation of purchase and sales restrictions. Fuzhou, Quzhou, Qinhuangdao and Lanzhou, which have recently been relaxed, are either the capital of eastern coastal provinces or the core metropolitan cities. Fuzhou City relaxed the restriction, the registered residence of the non Fuzhou five districts does not need to provide the medical social security or tax certificate or settlement for 12 months in the past two years. It can purchase a general residential building with a level below 144 square in Fuzhou. The registered residence of non city households in Quzhou can purchase new and second-hand houses in the urban area, and the 144 or more new apartments that have not been signed in the land have not been sold. Qinhuangdao completely abolished the purchase restriction; Lanzhou launched a more comprehensive easing policy, relaxed purchase restrictions, reduced the proportion of down payment of commercial loans, and implemented the policy of “recognizing loans but not houses”.
Zhou’s view: in early March, the government work report mentioned that the real estate should explore new models and promote rental housing and long-term rental housing. This week, the minutes and relevant documents issued by the Ministry of housing and urban rural development, the Ministry of finance, the central bank and the China Banking and Insurance Regulatory Commission pointed out that under the current complex situation, the policy should release enough good information. The real estate policy will be relaxed under the requirements of “stabilizing land prices, house prices and expectations”. In 2022, the policy warm wind blows frequently, and nearly 70 cities across the country relax regulation. In the early stage, it mainly focused on the third and fourth tier cities, and now it has been expanded to the second tier cities, and the policy relaxation has been further strengthened. We believe that a new round of more in-depth relaxation of the national property market has been started, and it is expected that more cities with depressed markets will strengthen the deregulation. In addition, the current demand side policy adjustment is more frequent. Considering that the real estate situation is still not optimistic, many real estate enterprises are facing a liquidity gap, stabilizing the economy needs to stabilize the real estate, and supply side improvement policies may be issued in the future. In terms of indemnificatory rental housing, at present, many mainstream real estate enterprises have arranged the rental housing business, and some have the asset management ability of rental housing, so the development to the indemnificatory rental housing business is also relatively smooth. With the support of current financial policies, such enterprises are more attractive for financing. Future industry risks depend on real estate structure adjustment and policy support. It is suggested to pay attention to 1) the leading real estate enterprises with high credit in the field of rental housing: Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development; 2) Real estate post cycle property management company: Poly property, country garden services, China Merchants Property Operation & Service Co.Ltd(001914) , Xuhui Yongsheng services.
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 situation is repeated and develops beyond expectations
