Hold the bottom line of no systemic risk, and the loosest policy has been introduced since 2015. Compared with previous statements, this Politburo meeting released more positive signals. Adhering to the main tone of “housing, housing and non speculation”, the first is to put forward the requirement of “effectively controlling key risks and holding the bottom line without systemic risks” for the first time, indicating that the risks currently facing the real estate market need to be resolved and prevent the real estate risks from spreading to other fields. The second is to make “one city, one policy and one policy for the city” more concrete, which is clearly defined as “supporting all localities to improve the real estate policy from the local reality”, encouraging local governments to introduce new relaxation policies to improve the real estate policy, and making the main responsibility of local governments more clear. Third, the “support to meet the reasonable needs of property buyers” mentioned in the December 2021 meeting was changed to “support rigid and improved housing needs”, and the goal of local policy relaxation was more detailed, opening up space for local rigid and rigid demand. Fourth, it formally proposed to “optimize the supervision of commercial housing pre-sale funds”, on which local governments can further issue substantive policies to provide tools for enterprises to open up the cash flow cycle and prevent enterprise risks.
The real estate market continued to decline, and local governments expanded policy space. The willingness, purchasing power and expectation of residents on the demand side continue to decline, and the market performance on the demand side continues to decline. The second and third rounds of land auction at the land end have reduced land acquisition by private enterprises, more state-owned enterprises and local urban investment support, and the land auction market is getting colder. At the financing end, some private enterprises have debt extension or substantial default, a large number of private enterprises have been downgraded, overseas debt issuance is difficult, banks have also tightened the financing channels of private enterprises, and the financing costs of private enterprises have begun to increase. At this meeting, the target of GDP growth of 5.5% remains unchanged. When the GDP in the first and second quarters is expected to be lower than the target and the above market fundamentals have not improved, local governments need to further strengthen policy easing. The relaxation of this policy is far less than that of the two rounds of cycles in 2008 and 2014. Before this meeting, this cycle is dominated by the implementation of policies in various places due to cities. The number and energy level of cities that substantially relax the purchase and loan restrictions and reduce the down payment ratio are insufficient. Most of the relaxed urban policies are still single, and the number and range of RRR reduction are also less than those of the previous rounds. It is expected that after this meeting, local cities will further strengthen policy relaxation and introduce more comprehensive policies, not only on the supply side, but also on the financing side, so as to open enterprise financing channels and effectively control key risks by using monetary policy and adjusting pre-sale fund supervision policy.
Continue to be optimistic about the real estate market. From the perspective of the year-on-year growth rate of commercial housing sales area, the largest decline in this cycle is 21.7%, with an average decline of 14.5%, which has exceeded the decline in 2014 and is close to the decline in 2008. The downward cycle is 8 months, which is close to 10 months of the 2008 cycle and 13 months of the 2014 cycle. The market has entered the bottom stage. After this meeting, it is expected that due to the increasing efforts of urban implementation, the energy level of urban relaxation will gradually improve, and the stabilization and recovery of the real estate market has become an inevitable trend. Real estate investment and housing consumption are still important pillars of the economy. This year, we should stabilize the economy and strive for GDP 5 The growth target of 5% is indispensable for stabilizing real estate. We believe that this cycle is close to the bottom of the market, the most difficult period of industry operation has passed, and the period of rapid table shrinkage of enterprises has also passed. At the current time point, we suggest paying attention to the large state-owned enterprises that can continue to expand their tables and maintain national expansion, such as poly real estate, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , CNOOC real estate, China Resources Land, and regional leaders with obvious regional advantages and can realize differentiated competition, such as Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Xuhui holding, Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , etc. In terms of property sector, it is suggested to pay attention to Jinke service, Xuhui Yongsheng service, country garden service and China Resources Vientiane life with strong independence, external expansion and value-added services and continuous expansion ability.
Risk factors: policy risk: the progress of policy relaxation is less than expected. Market risk: the decline of sales in the real estate industry exceeded expectations.
