Investment: the new construction area continued to fall, and the investment willingness of development enterprises was poor: from January to March, the national real estate development investment was 2.78 trillion yuan, a year-on-year increase of 0.7%, a decrease of 3PCT compared with January to February. The new construction area of houses in China was 298 million square meters, a decrease of 17.5%, a decrease of 5.3pct compared with January to February. Structurally, the sharp drop in the newly started area led to a 21.5% drop in the construction area in March, resulting in a drop in the overall investment. Deep-seated reasons we believe that on the one hand, the current enterprise funds are tight, and it is difficult to recover funds under the current market, so developers tend to be cautious about investment; On the other hand, under the downward trend of the real estate market, the performance of traditional sales peak seasons such as Spring Festival and golden three silver four in 2022 is relatively flat, which affects the confidence of development enterprises in the future of the market to a certain extent. The repair of real estate investment in the future still depends on the expected improvement of the real estate market.
Land: the market rebounded slightly in March, and the overall heat is still low: from January to March, the land purchase area of real estate development enterprises was 13.39 million square meters, a year-on-year decrease of 41.8%, an increase of 0.5pct compared with January to February, and the land transaction price was 67.2 billion yuan, a year-on-year decrease of 16.9%, an increase of 9.8pct compared with January to February. Even in the first round of centralized land supply, the supply of high-quality plots is increased, the premium rate is reduced, and the profit space is released, the overall land acquisition willingness of private enterprises is still not strong. The main reason is that the current market heat is still low. Some enterprises are still subject to the recurrence of the epidemic, unsatisfactory de urbanization and tight enterprise liquidity. They are more cautious in land investment. It is expected that with the passing of the debt repayment peak in the first half of the year, the land market heat will gradually recover after the enterprise liquidity problem is alleviated.
Sales: the data continues to be sluggish, and residents’ confidence still needs time to repair: from January to March, the sales area of commercial housing was 310 million square meters, a year-on-year decrease of 13.8%, an increase of 4.2pct compared with January to February, and the sales amount was 2.97 trillion yuan, a year-on-year decrease of 22.7%, an increase of 3.4pct compared with January to February. On the whole, since August 21, the year-on-year growth of sales area and amount has been about – 15% and – 20% respectively, with no obvious improvement signal. In March, the average monthly sales price of commercial housing was 925241 yuan / m2, down 6.02% month on month compared with the previous month. Buyers still have expectations for future price cuts and strong wait-and-see mood. For the loose policies introduced by some cities, due to the delay in the entry into force of the policies, we think the effect will be shown in the second quarter.
Financing: the decline of funds in place was expanded, and the mortgage loan policy was loose: from January to March, the development funds in place were 3.8 trillion yuan, a year-on-year decrease of 19.6%, an increase of 1.9pct compared with the decline from January to February. Compared with January February, the decline of Chinese enterprises’ loans has expanded, but the fluctuation is small. The decline of self raised funds has narrowed, the degree of change between self raised funds and Chinese loans is backward, and the proportion of self raised funds of development enterprises has gradually increased. The policy on mortgage loans has been gradually relaxed. Since October 21, the number of mortgage loan lending cycles has gradually decreased. The mortgage loan lending cycle in March was about 31 days, which has reached a record low. The loan interest rate of the first house has been down for six consecutive months, and now it has been as low as 5.34%. The mortgage interest rate determines the actual cost of residents’ house purchase. It is a sensitive variable affecting residents’ demand and is expected to improve residents’ willingness to buy a house.
Top 100 real estate enterprises: some real estate enterprises recovered significantly month on month, and the transactions of real estate enterprises in danger continued to deteriorate: from January to March, the cumulative sales of top 100 real estate enterprises reached 1627.9 billion yuan, a year-on-year decrease of 47.1%, an increase of 2.7pct compared with the previous month. From the month on month comparison, the sales in March showed signs of recovery, mainly due to the downturn of home purchase tide during the Spring Festival week in February and the overweight of loose policies after the year. Real estate enterprises with relatively good urban energy level layout can give priority to benefiting from the market recovery. The ranking of real estate enterprises in danger decreased significantly, and buyers’ concerns about the uncompleted residential flats of thunderstorm real estate enterprises led to almost no signs of recovery in the sales of such enterprises in a single month in March, and the transaction end continued to deteriorate.
Bond financing: domestic and foreign bond financing recovered: in March 2022, the domestic and foreign financing of real estate enterprises was 94.4 billion yuan, a year-on-year decrease of 7.7%, a sharp decrease of 6.6pct compared with February, and a month on month increase of 98%.
The business environment of the industry has improved and the policy easing continues: the impact of the market epidemic in March has further exacerbated the downward pressure on the economy this year. From 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: the progress of policy relaxation is less than expected, and the decline of sales in the real estate industry is more than expected.
