Comprehensive RRR reduction releases positive signals from the real estate sector. On April 15, in order to support the development of the real economy and promote the steady decline of comprehensive financing costs, the people’s Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, 2022. Looking back on the 23 times that the central bank has lowered the deposit reserve ratio since 2008, the real estate sector has ushered in an increase within one month after the RRR reduction. After the RRR reduction, the central bank releases liquidity, the demand side improves, and the leading real estate enterprises usually benefit first. The central bank lowered the reserve requirement by 25bp this time, which is lower than the previous reduction of more than 50bp. According to the calculation of the macro group of Cinda securities, the long-term capital gap of the banking system in the reserve account of the central bank in 2022 is about 1.5 trillion. After the central bank turned in 1 trillion profits to form fiscal expenditure, it replenished 1 trillion liquidity, and the remaining gap is 500 billion. The overall reduction of the reserve requirement by 50bp released more than 1 trillion liquidity, so the central bank lowered the reserve requirement by 25bp this time, RMB 530 billion was released, which accurately matched the remaining liquidity gap. Through this, the liquidity gap of the whole year has been solved. The current economic problem is still the repeated epidemic and weak demand for real estate financing. The economic marginal effect of reducing reserve requirements and interest rates may be weakened. Repeated outbreaks and high uncertainty still need real estate to boost the economy. Therefore, the real estate easing policy will continue, and the demand side stimulation is an important starting point.
The implementation of policies around the city is still increasing. Banks in more than 100 cities across the country have lowered mortgage interest rates according to market changes and their own business conditions, with an average range of 20bp to 60BP. From the perspective of previous mortgage interest rate cuts, in the cycle with large downward range and long duration of the industry, the decline range and cycle of mortgage interest rate are correspondingly longer. Considering that the current market sales are still low, with reference to the national average mortgage interest rate of 5.34% for the first house in March, there is still 74 BP space between the mortgage interest rate and LPR, it is expected that there is a large downward space for the mortgage interest rate. Many places have cancelled the sales and purchase restrictions and other policies, because the scope and intensity of urban implementation are still increasing. Due to the implementation of urban policies, the easing policy has gradually expanded from third and fourth tier cities to key second tier cities, and the easing intensity has increased from reducing the down payment ratio to relaxing purchase and sales restrictions. On March 30, the transaction area of commercial housing in large and medium-sized cities was 9.69 million square meters, a year-on-year decrease of 47% and a month on month increase of 36%. Stimulated by the loose policy on the demand side, the transaction area of commercial housing improved month on month, but the year-on-year decline continued to expand. The industry is still in the process of changing from the bottom of the policy to the bottom of the market. It is expected that more cities will introduce stronger policies in the future to alleviate the pressure on the capital chain of real estate enterprises, repair the financing capacity of real estate enterprises, relax and cancel the five restrictions on the improved demand on the demand side, and promote the industry to return to the road of virtuous circle.
The real estate market continues to deduce. With the increasing implementation of urban policies and the gradual improvement of the energy level of urban relaxation, the stabilization and recovery of the real estate market has become an inevitable trend. Superimposed on the impact of the market epidemic in March, it further exacerbates the downward pressure on the economy this year. From the perspective of the comprehensive economic situation and the real estate market. 1. Real estate investment and housing consumption are still important pillars of the economy. The policy environment of the follow-up real estate industry this year will be very friendly and will continue in the short term; 2, the current real estate market foam is relatively low. In the past, too strict regulation and control policy has completed its historical mission, and will continue to withdraw from the market. 3. The systemic risks caused by the debt pressure of real estate enterprises need to be solved urgently. It is urgent to resolve the industry risks. The profit space of the industry will be gradually repaired from this year. At the current time point, we suggest to focus on Poly Real estate, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , CNOOC real estate, China Resources Land, and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Xuhui holdings, Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , etc. In terms of property sector, it is suggested to focus on strong independence, Jinke service, Xuhui Yongsheng service, country garden service and China Resources Vientiane life. In addition, considering the possibility of refinancing liberalization, it is suggested to focus on Shenzhen New Nanshan Holding (Group) Co.Ltd(002314) and Huafa Industrial Co.Ltd.Zhuhai(600325) .
Risk factors: policy risk: the progress of policy relaxation is less than expected, and the policy regulation of real estate tax and pre-sale funds is more than expected. Market risk: the decline of sales in the real estate industry exceeded expectations.
