Main points:
Events
The National Bureau of statistics released the real estate development investment and sales data from January to March 2022.
Sales side: the sales of commercial housing was weak from January to March, and the follow-up epidemic situation, policies and actions of real estate enterprises will be observed
From January to March 2022, the sales area of commercial housing was – 13.8% (from January to February – 9.6%) year-on-year and – 17.7% in a single month in March; The sales amount was – 22.7% year-on-year (January February – 19.3%) and – 26.2% in a single month in March. Among them, the cumulative amount of residential sales was – 25.6% (January February – 22.1%). In terms of price, the average national sales price from January to March 2022 was – 8.38% (January to February – 10.75%) year-on-year; From the regional dimension, the average sales price in the eastern region still ranks first in the four regions, reaching 13572 yuan / m3. Looking back, the high-frequency transaction area data of 30 large and medium-sized cities from April 2022 to now (as of April 16) show a year-on-year increase of – 56.8%. Sales continued to be weak from January to March, and the fluctuation trend of short-term decline needs to be observed: I) the follow-up implementation of policies, II) the impact of covid-19 epidemic, and III) the strength of “price for volume” of real estate enterprises.
Commencement and completion: the decline of new construction is expanded, and the completion under “guaranteed delivery” is expected to resume growth
From January to march in 2022, the new construction was – 17.5% year-on-year (from January to February – 12.1%) and – 22.2% in a single month in March. From the perspective of transmission from land acquisition to commencement, there is a time lag of 2 ~ 3Q between land acquisition and sales.
Subdivided to the urban level, the “two concentration of land supply” has significantly disturbed the rhythm of land acquisition. Considering the implementation of regulatory policies such as “three red lines” and “real estate loan concentration management”, especially in the control of investment amount, there is an indicator constraint that the land acquisition amount / sales amount of the current year shall not exceed 40%, and the land acquisition attitude of real estate enterprises will become more and more cautious. It is worth noting that the new construction of Q1 in 2022 will fluctuate accordingly when the land acquisition end lags behind, and the ability of real estate enterprises to actively adjust the construction rhythm may be weakened. Due to the large number of urban investment companies taking land in the second and third rounds of centralized land supply in 2021 (urban investment accounts for 43% of the third batch of land sold according to the number of projects), such projects are more likely to seek the cooperative development of brand real estate enterprises, which is also one of the factors leading to the slowdown of project construction speed. The completed area from January to march was – 11.5% (January to February – 9.8%) year-on-year, and the single month in March was – 15.5%. Since the end of 2021, the policy of guaranteeing delivery intensively issued by the government has gradually come into effect, and the completion in 2022 is expected to resume growth.
Investment side: the development investment turned negative year-on-year in a single month, and the contribution of land investment continued to decrease
From January to march in 2022, the completed amount of real estate development investment was + 0.7% (from January to February + 3.7%) year on year, and – 2.4% in a single month in March. It is noted that the land transaction and construction area from January to march was – 41.8% year-on-year (January to February – 42.3%). Considering the implementation of centralized land supply and the differentiation under the “urban implementation strategy”, the land acquisition strategy of real estate enterprises remains conservative, and the hot differentiation between regions of the land market is more obvious. As the main part of development investment, the contribution of land investment to development investment may continue to weaken in the future. In addition, this year’s “government work report” again mentioned new urbanization and orderly promotion of urban renewal. Coupled with the recent promotion of shed reform under the new deal in Zhengzhou, urban renewal is expected to “fill the vacancy” in the future to improve the toughness of real estate development investment.
Financing end: the funds in place from January to March were – 19.6% year-on-year, and each subdivided channel was negative year-on-year in a single month
From January to March 2022, the funds in place were – 19.6% (January to February – 17.7%) year-on-year and – 23.0% in a single month in March. Structurally, in March, China’s single month loans (YoY – 29.7%), self raised funds (YoY – 2.3%), payment collection (down payment + mortgage) (YoY – 32.9%) [including personal mortgage (YoY – 22.1%) and down payment (YoY – 37.5%)]. In terms of proportion, sales collection is still the main source of funds (51.6% in March and 51.0% from January to March). All sub channels are negative year-on-year in a single month. With the relaxation of the policy, the overall mortgage demand of residents has improved compared with that of the previous month, but there is still pressure. It can be confirmed from the statistical data report on the scale of social financing released by the central bank in March that the loans of residents’ departments resumed positive growth, with an increase of 753.9 billion yuan in March, 384.8 billion yuan in short-term loans and 373.5 billion yuan in medium and long-term loans respectively, but a decrease of 139.4 billion yuan and 250.4 billion yuan year-on-year respectively. Looking back, under the guidance of a virtuous circle and policies for urban implementation, and on the basis of ensuring the release of residents’ reasonable purchase demand, the financing end is expected to be repaired.
Investment advice
Following the “three red lines”, the introduction of policies such as “real estate loan concentration management” and “two concentration of land supply” will restrict supply and demand in both directions. The regulation of wind direction has not changed, and “stability first” is still the main tone, and the space for large-scale expansion is narrow. At present, the valuation and position of the sector have been at an all-time low. The restriction of supply and demand at both ends of the industry has exacerbated the disharmony between land acquisition, sales and leverage reduction. Suggestions: (1) steady development type: Poly Developments And Holdings Group Co.Ltd(600048) , Vanke A, Gemdale Corporation(600383) ; (2) Growth benefit type: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) ; (3) Quality objects of property management: Country Garden service, China Resources Vientiane life, Jinke service, Baolong business, etc.
Risk tips
The real estate regulation and control policy is stricter, the sales repair is less than expected, and the capital is greatly tightened
