This week’s core view: the central government cut interest rates and reduced the minimum interest rate of housing loans. All localities continue to introduce relaxation policies. This week, local policies are more comprehensive, and the city’s energy level is upgraded to a second tier city. This week, the transaction area of new houses was flat month on month, the year-on-year decline expanded, and there was a lot of decline in first tier cities. The transaction area of second-hand houses decreased month on month, and the year-on-year growth rate turned negative again. In terms of land, the year-on-year growth rate of supply transaction area was still negative, the supply area increased more, the transaction area was basically the same as last week, the supply-demand ratio rose to 1.65, and the overall premium rate increased. In terms of financing this week, the debt issuance and repayment amount increased significantly, the year-on-year growth rate of debt issuance returned to positive for the first time in nine months, the net financing amount decreased, and the issuance of trust also increased this week. On May 16, 2022, the second round of centralized land supply in Nanchang was originally planned to transfer 19 cases, 10 cases terminated the transaction for some reason, 6 cases of premium transaction (including 4 cases of top wagging) and 3 cases of base price transaction among the other 9 cases, with a total transfer fee of 5.388 billion yuan and a total transfer area of 335500 square meters. The residential plots sold this time are sold with “limited land price” and adopt the compound transaction mode of “online auction + random lottery”.
Key policy analysis: on May 15, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on issues related to the adjustment of differentiated housing credit policies. For resident families who buy ordinary self owned houses with loans, the lower limit of the interest rate of commercial individual housing loans for the first set of houses was adjusted to no less than the market quotation interest rate of loans for the corresponding period minus 20 basis points. This credit policy adjustment is the first national real estate regulation and relaxation policy in this cycle, with obvious demonstration effect. Its significance lies in: 1) opening the space for the lower limit of mortgage interest rate. 2) Mortgage interest rates are expected to accelerate the decline. 3) Reduce house purchase costs and effectively support residents’ purchasing power. 4) The financial side policy is expected to continue to follow up nationwide. On May 20, the people’s Bank of China authorized the national interbank lending center to announce that the quoted interest rate (LPR) of the loan market on May 20, 2022 was: the one-year LPR was 3.7%, unchanged from the previous month; The LPR over 5 years was 4.45%, down 15bp from 4.6% last month. The benchmark interest rate reduction has two characteristics: 1) the 5-year LPR is reduced separately for the first time, and the remedy is “stabilizing the real estate”. 2) Sharply cut 15bp, superimposed on the lower limit of mortgage interest rate cut on the 15th, and the mortgage interest rate is expected to accelerate the decline. The mortgage interest rate is expected to accelerate the decline, and the purchasing power of residents on the demand side will be improved, which is conducive to the recovery of market sales.
One week market review: this week (2022 / 5 / 162022 / 5 / 20), the Shenwan real estate index rose 0.57%, underperforming the Shanghai Composite Index by 1.45pct, ranking 31st / 32 among various sectors, and the Hang Seng real estate construction industry index rose 3.44%, underperforming the Hang Seng Composite Index by 0.55pct. The real estate companies with the top three increases this week are: Beijing Zodi Investment Co.Ltd(000609) (48.54%), Tieling Newcity Investment Holding (Group) Limited(000809) (24.77%) and jiulongcang group (20.78%). The top three real estate companies that fell this week were: Cccg Real Estate Corporation Limited(000736) (- 17.72%), Jinke Property Group Co.Ltd(000656) (- 11.48%), Shenzhen Special Economic Zone Real Estate&Properties (Group).Co.Ltd(000029) (- 8.22%). This week (May 16, 2022-may 20, 2022), the Hang Seng property service and management sector rose 3.04%, underperforming the Hang Seng Composite Index by 0.95pct and the Hang Seng China enterprise index by 1.57pct, ranking 23rd / 28th among various sectors. The top three companies that rose this week were Xuhui Yongsheng service (10.65%), rongchuang service (9.86%) and Country Garden Service (9.61%). The top three companies that fell this week were Jiayuan service (- 74.52%), Jinke service (- 9.09%) and excellent business service (- 7.05%).
Real estate market monitoring: new house transaction data this week (2022 / 5 / 142022 / 5 / 20): the transaction area of new houses in 30 large and medium-sized cities was 2.2086 million square meters, with a month on month decrease of 0.1% and a year-on-year decrease of 54.4%. The transaction area of second-hand houses in 115 cities was 1.4328 million square meters, a month on month decrease of 12.5% and a year-on-year decrease of 26.9%. Last week (2022 / 5 / 9-2022 / 5 / 15), the land supply and construction area of 100 large and medium-sized cities was 289794 million square meters, a year-on-year decrease of 5.9%, a month on month increase of 78.62%, the land transaction and construction area was 177062 million square meters, a year-on-year decrease of 56.3%, a month on month increase of 2.51%, and the supply-demand ratio rose to 1.65.
Financing of real estate enterprises: this week (May 16, 2022-may 22, 2022), the total amount of new bonds issued by real estate enterprises in China was 10.65 billion yuan, an increase of 23% year-on-year and 33.8% month on month. In terms of trust issuance, 17 real estate trusts were issued this week, with an issuance scale of 2.19 billion yuan, a month on month increase of 17.87%, an average annual yield of 7.52% and an average term of 1.8 years.
Risk factors: policy risk: the progress of policy relaxation is less than expected. Market risk: the market recovery of the real estate industry is less than expected, and the epidemic control is less than expected.
