The cumulative growth rate of real estate development investment in 2021 continued to decline: the completed amount of real estate development investment in 2021 was + 4.4% year-on-year in 2020, 1.6pct lower than the growth rate from January to November, and + 11.7% year-on-year in 2019. We believe that the reasons for the continuous narrowing of the cumulative growth rate of investment in 2021 are as follows: 1) affected by the epidemic, the completion amount of development investment in 2020 is low before and high after, and the growth rate in 2021h2 is down due to the high base; 2) Since 2021q3, due to the tightening of industry liquidity, the land acquisition funds of real estate enterprises have been limited, resulting in the decline of land investment; 3) The scissors difference between newly started area and completed area caused the growth rate of construction area to continue to decline during the year (newly started area - 11.4%, completed area + 11.2%).
The land purchase area grew negatively throughout the year, and the month on month growth rebounded in December: since the implementation of centralized land supply in 22 cities in 2021, the growth rate of land purchase area has decreased step by step, with a year-on-year cumulative growth rate of - 15.5%, an increase of 4.3pct compared with January November 2021. We believe that the main reasons for the large decline in land acquisition area in 2021 are: 1) the limited financing of real estate enterprises and the pressure drop of H2 personal mortgage loans lead to weak demand and limited land acquisition funds of real estate enterprises; 2) In 2021, two centralized local auctions will be implemented for the first time, and the policies in terms of participation threshold and bidding requirements will be adjusted with the market, resulting in excessive concentration of supply between cities. In view of the above two points, we believe that the policy has been corrected in the capital of real estate enterprises, and the first problem has been gradually alleviated; In the second year of centralized land supply and land auction in 2022, the policy stability will be enhanced, the conditions of land auction will be better than that in 2021, and the land investment is expected to pick up, but the pace still depends on the capital repair of real estate enterprises.
The sales area and amount of commercial housing maintained a positive growth: in 2021, the sales area of commercial housing was 1.79 billion square meters and the sales amount was 18.2 trillion yuan, with a year-on-year increase of + 1.9% and + 4.8% respectively, down 2.9pct and 3.7pct respectively compared with the cumulative year-on-year growth rate from January to November, and 0.7pct and 3.9pct respectively compared with the growth rate in 2020. In December, the sales area and amount of commercial housing in a single month were 2.1 trillion yuan and 2 trillion yuan respectively, with month on month growth rates of + 41.2% and + 39.9% respectively. December is usually the year-on-year push and sales peak, with a month-on-month increase of + 44.71% in December 2019 and + 43.96% in 2020. In terms of average sales price, the average monthly sales price in December was 9512 yuan per square meter, a year-on-year increase of - 3% in 2020 and + 4% in 2019.
In December, the industry's funds in place were still tight, and the funds were inclined to high-quality real estate enterprises: in 2021, the funds in place of real estate development enterprises were 20.1 trillion yuan, a year-on-year increase of + 4.2%, down 3PCT from January to November and 3.9pct from 2020. Among them, the year-on-year growth rates of Chinese loans and personal mortgage loans in December were - 31.6% and + 3.2% respectively. From the data of December, we believe that the funds in place in the real estate industry are still tightening, and the implementation of the "wide credit" series of policies takes time, among which the high-quality real estate enterprises with stable finance have a greater probability of obtaining capital preference. We believe that the differentiation of improved capital drives the evolution of industry competition pattern, and high credit real estate enterprises continue to benefit.
Investment suggestions: continue to be optimistic about the success of high credit enterprises in the evolution of this round of industrial competition pattern. It is suggested to pay attention to A-Shares - China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , zhaoshekou, Gemdale Corporation(600383) , China Merchants Property Operation & Service Co.Ltd(001914) ; H shares - China Resources Land, China overseas development, Longhu group, Xuhui holding group, etc.
Risk tip: the speed of policy correction is lower than expected, and the repair on the demand side is lower than expected.
