Event: on April 18, the National Bureau of statistics released the data of national real estate development investment, new construction and sales in the first quarter of 2022.
Comments:
Sales continued to decline, and the market recovery faced a double test of residents’ ability and willingness to purchase houses. The National Bureau of statistics released the investment and sales data of commercial housing from January to March 2022. From January to March 2022, the sales area of commercial housing nationwide was 310million square meters, a year-on-year decrease of 13.8% and a month on month decrease of 4.2%; Commercial housing sales reached 297 million yuan, down 22.7% year-on-year and 3.4% month on month. From a regional perspective, the cumulative year-on-year growth rates of sales in the eastern, central, Western and northeast regions were – 27.7%, – 11.8%, – 16.9% and – 33.9% respectively.
Industry sales are still in the downward channel. The recurrence of the epidemic in the first quarter of 2022 once again reduced the economic vitality, combined with the structural adjustment of some industries, and the ability of residents to buy houses was affected to a certain extent. On the other hand, the overall regulation and control of medium and high-energy cities is less relaxed, and the residents’ willingness to buy houses is not strong at present. In the future, we believe that the recovery of industry sales still needs further policies to support the bottom of the property market, and the whole recovery process will be relatively slow.
The new construction continued the negative growth trend, and the completion progress was affected
From January to March 2022, the new construction area of houses in China was 298 million square meters, a year-on-year decrease of 17.5% and a month on month decrease of 5.3%; New construction in the industry has continued the trend decline since the second half of 2021. The core reason is the reduction of land acquisition in the industry as a whole. At the same time, the progress of new construction of the project has been delayed repeatedly under the condition of tight funds of real estate enterprises. From January to March 2022, the completed area of houses was 169 million square meters, a year-on-year decrease of 11.5% and a month on month decrease of 1.7%. Considering the continuous increase in the proportion of future house sales since 2019 and the requirements of hard constraints on house delivery, the national completion growth rate may be low before and high after, and gradually pick up with the improvement of the capital situation of the industry.
Industry investment fell as scheduled, and the funds in place of real estate enterprises continued to decline
From January to March 2022, the investment in real estate development increased by 0.7% year-on-year and decreased by 3.0% month on month; In the same period, the year-on-year growth rates of land area purchased and land transaction price were – 41.0% and – 16.9% respectively. The growth rate of industry investment fell as scheduled.
Considering the significant reduction of industry investment and land acquisition since the second half of 2021, the subsequent new construction area is expected to continue to be under pressure, and the industry investment will still face great downward pressure. From January to March 2022, real estate development enterprises paid in 3.82 trillion yuan, a year-on-year decrease of 19.6% and a month on month decrease of 1.9%. At present, the relaxation trend of the policy side has not been significantly transmitted to the market side, the industry sales are still depressed, the pre-sale fund supervision is superimposed, the improvement of the sales side funds of real estate enterprises is limited, and the liquidity pressure remains; On the financing side, the financing support of financial institutions to most real estate enterprises is still insufficient. Due to the delay of credit expansion under the superposition of the epidemic, the industry as a whole is still facing great capital pressure.
Investment advice
It will take time for the market to recover. The follow-up policies are expected to be friendly and more effective policy combinations are expected to be introduced one after another.
This round of supply side reform has reshaped the business model of real estate enterprises to a certain extent. For those real estate enterprises with excellent management ability and stable financial style, they have stronger operating efficiency and achieve long-term market share improvement and internal value thickening. Beneficiary objects: (1) Poly Developments And Holdings Group Co.Ltd(600048) , China overseas development, China Resources Land, China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Xuhui holding and other steady leaders occupying a large market share of the core urban agglomeration; (2) Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Yuexiu real estate, Xiamen C&D Inc(600153) and other regional high-quality real estate enterprises deeply cultivating the core urban agglomeration.
Risk warning: sales recovery is not as expected; Policy regulation has changed beyond expectations.
