Volume and price of commercial housing: on December 30, the transaction area of commercial housing in large and medium-sized cities increased by 16.17% month on month and decreased by 22.79% year-on-year. The transaction volume is still significantly lower than that in the same period of previous years. The average price of newly-built houses in Baicheng fell by 0.02% month on month for two consecutive months.
Real estate loans: in December, the average interest rate of the first set of housing loans in 103 monitored cities was 5.64%, and the average interest rate of the second set of housing loans was 5.91%, all 5 BP lower than that in November. The issuance of individual housing loans also accelerated. The average lending cycle of 103 monitored cities was 57 days, 11 days shorter than that of the previous month.
Policy: the central economic work conference called for “supporting the commercial housing market to better meet the reasonable housing needs of buyers and promote the healthy development and virtuous cycle of the real estate industry”. The people’s Bank of China and the China Banking and Insurance Regulatory Commission encourage the merger and acquisition of high-quality projects of real estate enterprises in difficulty; Shijiazhuang, Huzhou and Xiamen strengthened the supervision of commercial housing pre-sale funds, and Hengyang, Guilin and Jingmen issued new regulations to subsidize buyers.
Key real estate enterprises: in December, the sales trading amount of top 100 real estate enterprises decreased by 35.2% year-on-year; The proportion of external guarantee balance of several real estate enterprises in net assets is high; Hesheng Chuangzhan plans to issue guaranteed convertible bonds with a coupon rate of 8%; Longhu group and Jindi Co., Ltd. registered and issued financing instruments in the inter-bank market.
Bond issuance and maturity: in December, the real estate industry issued 52.387 billion yuan of bonds, and the net financing through the bond market was – 23.313 billion yuan. From September 2020 to December 2021, the bond stock scale of China’s real estate industry decreased by about 243.433 billion yuan.
Credit events and interest spread: in December, two bonds defaulted and four bonds were extended, with overdue principal and interest of about 4.153 billion yuan. The credit ratings of 9 entities and 42 bonds were downgraded. The bond credit spread (median) of industrial real estate industry increased by 9.69bp month on month, of which the AA credit spread decreased by 22.80bp month on month.
Summary and Prospect: Recently, the financial regulatory authorities have encouraged high-quality real estate enterprises to merge and acquire projects of real estate enterprises with difficulties. The bank’s Project M & A loans for some large high-quality real estate enterprises are no longer included in the “three red lines” index. It is expected that in 2022, under the pressure of steady growth, the financing environment of real estate enterprises will be better than that of last year. However, we still need to pay attention to the risk of capital chain rupture of real estate enterprises with backlog of some stock projects and large-scale mortgage-backed financing.
