Key investment points
This week (2022.4.6 – 2022.4.8): the real estate sector (SW) rose and fell by + 1.64%. In the same period, the CSI 3 million and wandequan a index rose and fell by – 1.06% and – 1.74% respectively, and the excess return was + 2.70% and + 3.38% respectively.
Real estate fundamentals and high-frequency data: (1) real estate market: this week (2022.4.2-2022.4.8), the transaction area of new houses in 60 cities was 2.305 million square meters, with a month on month ratio of – 43.2% and a year-on-year ratio of – 65.1%; In 2022, the cumulative sales volume was 52.162 million square meters, a year-on-year increase of – 44.8%; From April 1 to April 8, 2022, the cumulative turnover was 2.764 million square meters, a year-on-year increase of – 63.9%. The transaction area of second-hand houses in 20 cities was 850000 square meters, with a month on month ratio of – 25.1% and a year-on-year ratio of – 50.1%; In 2022, the cumulative turnover was 13.893 million square meters, a year-on-year increase of – 43.2%; From April 1 to April 8, 2022, a total of 1049000 square meters were traded, with a year-on-year increase of – 46.3%. The cumulative inventory of new houses in 16 cities was + 12.5% month on month and + 3.3% year on year; The decontamination cycle increased by 2.5 months month on month. The de urbanization cycles of first tier, second tier and third and fourth tier cities were 13.1, 16.8 and 28.8 months respectively, up 5.4, 0.6 and 1.9 months respectively compared with last week. (2) Land market: this week (2022.4.4-2022.4.10), the number of land supplied by 100 cities was – 92.9% month on month and – 95.5% year on year; The construction area of supplied land was – 91.7% month on month and – 95.8% year-on-year. The construction area of land transaction in Baicheng was – 92.6% month on month and – 95.5% year on year; The transaction floor price was – 73.0% month on month and – 59.8% 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 rate and relaxation of provident fund to the relaxation of purchase and sale restrictions. On April 7, Chongqing issued the detailed rules for the implementation of financial support for new citizens to live and work in peace and contentment, which emphasized meeting the reasonable demand for house purchase credit and reasonably determining the first mortgage standard for qualified new citizens’ differentiated credit (at present, the first down payment ratio in Chongqing is 20% and the loan interest rate is 5.2%); Vigorously develop housing savings business (in order to obtain bank loans, buyers save in advance from the bank, accumulate housing consumption funds, and also obtain opportunities to improve their own credit, and support low-income people to realize “home ownership”), so as to reduce the cost of house purchase credit with the characteristics of “deposit before loan” and “constant low interest”. At the same time, we will increase support for affordable housing and the reconstruction of old urban communities. Chongqing’s current de commercialization cycle of commercial housing is only 8.1 months. Under the condition of healthy de commercialization cycle, it continues to boost the purchasing power of new residents, reflecting the government’s strong will to stabilize the property market.
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. Recently, the minutes of meetings 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, China Merchants Property Operation & Service Co.Ltd(001914) , Xuhui Yongsheng service.
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
