Industry comments
The performance of the real estate sector was lower this week, and the property sector outperformed Shanghai and Shenzhen 300. This week, Shenwan A-share real estate sector rose or fell by - 3.5%, ranking 23rd among all sectors; Wind Hong Kong stocks and real estate sector rose or fell by + 0.1%, ranking 20th among all sectors. This week, the Hang Seng property service and management index rose or fell by + 2.7%, the Hang Seng China enterprise index rose or fell by + 3.9%, and the Shanghai and Shenzhen 300 index rose or fell by - 2%;
On Monday, the sales area of hand houses increased month on month and still decreased year on year. This week (January 8 to January 14), commercial housing transactions in 40 cities totaled 5.64 million square meters, with a week-on-week ratio of + 37%, a week-on-year ratio of - 25%, a monthly cumulative year-on-year ratio of - 30% and an annual cumulative year-on-year ratio of - 30%. Among them, first tier cities: week on week + 7%, week on week - 6%, month on month - 7% and year on year - 7%; Second tier cities: Mom + 46%, yoy - 23%, cumulative yoy - 29% on a monthly basis, and cumulative yoy - 29% on an annual basis; Third and fourth tier cities: Mom + 49%, yoy - 49%, cumulative yoy - 53% on a monthly basis, and cumulative yoy - 53% on an annual basis.
This week, the transaction area of second-hand houses increased month on month and still decreased year-on-year. This week (January 8 to January 14), 17 cities sold a total of 1.75 million square meters of second-hand houses, with a week-on-week ratio of + 83%, a week-on-week ratio of - 17%, a monthly cumulative year-on-year ratio of - 26% and an annual cumulative year-on-year ratio of - 26%. Among them, first tier cities: week on week + 46%, week on week - 15%, month on month - 16% and year on year - 16%; Second tier cities: Mom + 100%, yoy - 9%, cumulative yoy - 22% on a monthly basis, and cumulative yoy - 22% on an annual basis; Third tier cities: yoy + 24%, yoy - 82%, cumulative yoy - 81% and cumulative yoy - 81%.
On December 70, the price index of new houses and second-hand houses in the city continued to decline month on month. According to the data released by the National Bureau of statistics, in December 2021, the price index of new commercial housing in 70 cities increased by 2.0% year-on-year and decreased by 0.3% month on month; The price index of second-hand houses in 70 cities increased by 1.0% year-on-year and decreased by 0.4% month on month. The new house and second-hand house price indexes have continued the downward trend since September, but the decline has not expanded. We believe that the house price index shows that although the decline in the sales market is no longer expanding, the month on month decline has not been reversed, and more policies are needed to reverse the trend. We expect more policy combinations to be introduced in the future, In order to prevent the current negative feedback cycle of the real estate industry (downward sales & strict control of pre-sale regulatory Funds & poor financing → poor cash flow of real estate enterprises → public debt default → runs caused by suppliers' and other creditors' demands for prepayment → outbreak of negative news → steep decline in sales → depletion of cash inflow of real estate enterprises, increasing inability to repay debts → more debt defaults) 。
The trend of house prices in cities with different energy levels is obviously differentiated, and the month on month growth rate of second-hand house price index in first tier cities has changed from negative to positive. On December 70, 2021, the year-on-year growth rate of new house price index in the first, second and third tier cities was 4.4%, 2.8% and 0.9% respectively; The month on month growth rates were - 0.1%, - 0.3% and - 0.3% respectively; 1、 The year-on-year growth rate of second-hand housing price index in second and third tier cities in December was 5.3%, 1.5% and 0% respectively; The month on month growth rates were + 0.1%, - 0.3% and - 0.5% respectively. First tier cities, whether new houses or second-hand houses, have better month on month price growth than second - and third tier cities. Second hand housing prices in first tier cities have turned positive month on month, while second and third tier cities are still in a downward trend month on month. The month on month growth rate of second-hand housing prices in the third tier cities has been negative since July, and the first and second tier cities have turned negative since September.
Investment advice
The real estate sector is optimistic about the head real estate enterprises with stable operation and the real estate enterprises with contrarian sales growth in 2021, such as Poly Developments And Holdings Group Co.Ltd(600048) and Greentown China. In the property sector, we believe that private property companies have greater flexibility in valuation repair after the liquidity crisis of related real estate enterprises is lifted, and recommend Jinke services.
Risk tips
The introduction of real estate improvement policies was slower than expected; The implementation effect of real estate improvement policies is less than expected
