The Information Office of the State Council held a press conference on January 11, 2022 to introduce the relevant information of the 14th five year plan for public services. The document puts forward the public service objectives in the fields of children’s education, learning and education, income from work, medical treatment, support for the elderly, housing, support for the weak, excellent military service guarantee and sports service guarantee. For housing, while continuing to do a good job in the areas of basic housing security such as public rental housing security for poor families, shantytowns transformation and rural dilapidated housing transformation, it is proposed to “actively promote the improvement of housing conditions” and “promote the equalization of basic public services”. We believe that while activating new space for industry transformation, it is also expected to accelerate the market-oriented flow of population factors, Further consolidate the advantages of agglomeration and development of urban agglomeration.
Indemnificatory rental housing is the main starting point of inclusive non basic public services
The document once again emphasizes the development of affordable rental housing for new citizens and youth groups in large and medium-sized cities with net population inflow, mainly small households with a construction area of no more than 70 square meters and a rent lower than the surrounding comparable projects. In response to a reporter’s question, the head of the housing security department of the Ministry of housing and urban rural development said: “during the 14th Five Year Plan period, 40 key cities preliminarily plan to add 6.5 million units / room, which is expected to help 13 million new citizens and young people alleviate their housing difficulties”. After deducting 936000 units raised in 2021, we estimate that during the 14th Five Year Plan period, the average annual construction and installation investment of indemnificatory rental housing in 40 large and medium-sized cities will drive the investment in real estate development (2020) by 1.19% – 1.67%, which is expected to buffer the potential decline of development investment in the short term and make up for the indemnificatory weakness of the dual track housing system in the medium and long term.
The potential room for housing improvement outside the old reform is still considerable
We believe that the ways to meet the demand for housing improvement are as follows: 1) reconstruction of old residential areas. The person in charge of the housing security department of the Ministry of housing and urban rural development clearly put forward that “during the 14th Five Year Plan period, the transformation task of about 219000 old urban communities built before the end of 2000 will be basically completed”; Taking the potential area of improved housing per capita of 35 square meters as the estimation standard, the stock housing area involved in the “old reform” of old urban communities is about 4.515 billion square meters. 2) Market-oriented replacement demand. According to the estimation of the sales area of commercial housing from 2000 to 2020, among the current 40 square meters of urban per capita housing area, 20 square meters will be built after 2000; Excluding the area of old reconstruction, the static estimation of potential improvement space is about 13.55 billion square meters; The specific release rhythm depends on the willingness of residents to actively improve and the passive demolition cycle of houses.
Equalization of public services to accelerate the market-oriented flow of population factors
The document proposes that “in combination with the reform of household registration management system, we should improve the mechanism of providing basic public services for non registered residence population with citizenship numbers as identification and registered residence years, and steadily realize the basic public services provided by permanent residents and cover all permanent residents.” Combined with the further deepening of registered residence system reform put forward by the State Office in January 6th, the overall plan of comprehensive reform of factor marketing allocation was put forward. We think that equalization of public services will further promote the marketization of population elements, strengthen the agglomeration and development effects of core city clusters, and provide support for local real estate.
Grasp the improvement of M & A on the left and concentration on the right
The future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios. Suggestions: 1) high quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Xuhui holding group; 3) High quality property management: Country Garden service, xinchengyue service, Greentown service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation and control remained high-pressure, and the pilot strength of real estate tax exceeded expectations; Subjective measurement deviation risk
