Industry comments
The real estate and property sector rebounded after a sharp fall this week. This week, Shenwan A-share real estate sector rose or fell by - 1%, ranking 8th among all sectors; Wind Hong Kong stocks and real estate sector rose or fell by - 0.7%, ranking 19th among all sectors. This week, the Hang Seng property service and management index rose or fell by + 3.5%, the Hang Seng China enterprise index rose or fell by + 4.7%, and the Shanghai and Shenzhen 300 index rose or fell by + 0.1%; The relative returns of the property index to Hang Seng China enterprise index and CSI 300 were - 1.2% and + 3.4% respectively.
The heat of soil auction in key cities increased. This week, 13.31 million square meters of residential land was sold in 300 cities across the country, with a month on week ratio of 20%, a year-on-year ratio of - 65% and an average premium rate of 7%. The local auction heat in Hangzhou and Shenzhen was high, of which 8 homesteads in Shenzhen were sold at the top price. Since the beginning of 2022, a total of 131.27 million square meters of residential land has been sold in 300 cities across the country, with a cumulative year-on-year increase of - 53%; Since the beginning of the year, green city China, China Construction Development real estate, China Resources Land, CNOOC real estate and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) have ranked among the top five in the industry.
On Monday, the sales of hand houses increased month on month and decreased year on year. This week, commercial housing transactions in 40 cities totaled 4.24 million square meters, with a week-on-week ratio of + 13% and a week-on-week ratio of - 48%, including a week-on-week ratio of + 21% and a week-on-week ratio of - 56% in first tier cities; Year on year ratio of the second tier cities to the second tier cities (- 42%); Third and fourth tier cities were + 17% mom and - 63% yoy.
This week, the sales of second-hand houses increased month on month and decreased year on year. Second hand housing transactions in 17 cities this week totaled 1.96 million square meters, with a week on week ratio of + 30% and a week on year ratio of - 27%, including + 9% and - 32% in first tier cities; Second tier cities + 38% mom and - 23% YoY; Third and fourth tier cities were + 24% mom and - 56% yoy.
After the meeting of the Political Bureau of the CPC Central Committee set the tone, all localities quickly introduced loose regulatory policies. On April 29, the Political Bureau of the CPC Central Committee held a meeting. When referring to the real estate industry, it first proposed to "support all localities to improve real estate policies based on local conditions and support rigid and improved housing demand", indicating that the central government has a positive attitude towards real estate regulation and the regulation flexibility of local governments is also higher. On the day after the meeting, Nanyang, Luoyang, Shenyang, Zhuzhou and other cities quickly introduced new policies for loose real estate regulation, and Huizhou, Shangrao and other cities also introduced new policies the next day to promote the health and stability of the real estate market, including but not limited to house purchase subsidies, increasing the loan amount and reducing the down payment ratio. A wide range of multi-dimensional loose regulation is continuing to be introduced. We expect that the loose regulation of real estate will continue, and we need to pay attention to the actual recovery of market sales in the future.
In April, real estate sales remained in the doldrums and stabilized slightly in the latter half of the year. In April 2022, the market sentiment was low, and the sales amount of real estate enterprises continued to decline due to the impact of the epidemic in many cities. According to Kerui data, from January to April 2022, the full caliber sales amount of top 100 real estate enterprises was 212.3 billion yuan, a year-on-year decrease of 50%; In April, it fell 59% year-on-year in a single month, and the decline continued to expand. From the weekly high-frequency data, in late April, the sales of first-hand and second-hand houses in cities at all levels still fell year-on-year, while the month on month data has risen for three consecutive weeks, and the market is at the bottom stage. We believe that the first and second tier cities in the Yangtze River Delta with good market fundamentals are expected to take the lead in stabilizing and warming up in this round, so as to drive the gradual recovery of the overall market.
Investment advice
The central government has set the tone for the industry, and it is expected that loose policies will continue to be introduced, and the market of high-quality first and second tier cities and cities in the Yangtze River Delta will take the lead in stabilizing. In the real estate sector, we recommend green city China, China Construction Development International and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , which have contrarian sales growth and strong performance certainty. In the property sector, we are optimistic about private property management companies with high density and value-added services, and recommend Jinke service and country garden service.
Risk tips
Loose regulation is less than expected; The epidemic affected the implementation of policies and market recovery
