Event: the National Bureau of statistics released the statistical data of the national real estate development industry in 2021, and the investment in real estate development increased by 4.4% year-on-year; The sales area and sales volume of commercial housing increased by 1.9% and 4.8% respectively year-on-year, and the funds in place increased by 4.2% year-on-year.
In December, the supply and sales of the industry decreased. The growth rate of investment in the real estate market reached a record low, the growth rate of construction narrowed, the decline of new construction in a single month expanded, the growth rate of completion in a single month decreased, and the decline of funds in place in a single month increased by 12 percentage points; Both sales and prices fell.
Real estate investment fell by more than 10% in a single month: in 2021, the cumulative investment in national real estate development was 14.76 trillion yuan, a year-on-year increase of 4.4%, and the growth rate decreased by 1.6 percentage points compared with that from January to November. In December, the monthly investment was 1.03 trillion yuan, a year-on-year decrease of 13.9%, and the growth rate decreased by 9.6 percentage points month on month.
The monthly growth rate of real estate investment in December was the worst since March 2020. The downward demand superimposed on the strict supervision of pre-sale funds, the pessimistic expectation of real estate enterprises on sales collection, and the decline of land acquisition and new construction will jointly drag down the growth of real estate investment.
Sales volume and prices fell together: in 2021, the sales area of newly-built commercial houses in China was 1.794 billion m2, with sales of 18.19 trillion yuan, a year-on-year increase of 1.9% and 4.8% respectively, down 2.9 and 3.7 percentage points from January to November. The average sales price was 10139 yuan / m2, a year-on-year increase of 2.8%. In December, the sales area and sales volume of commercial housing decreased by 15.6% and 17.8% respectively year-on-year; The average sales price was 9512 yuan / m2, a year-on-year decrease of 2.5%.
The year-on-year decline in the sales area and sales volume of commercial housing in a single month in December reflects the still weak demand. In the funds in place in November, the decline of deposit and pre-sale funds expanded, while the monthly growth rate of mortgage increased, indicating that the short-term recovery of sales in that month was due to the improvement of statistical data brought by the centralized delivery of mortgage, and the downward trend of long-term market prosperity remained unchanged.
The growth rate of construction narrowed, the decline rate of new construction in a single month expanded, and the growth rate of completion in a single month decreased: in 2021, the cumulative housing construction area in China was 9.754 billion m2, a year-on-year increase of 5.2%, 1.1 percentage points lower than that from January to November. In the whole year, the accumulated new construction area of houses was 1.989 billion m2, a year-on-year decrease of 11.4%, and the decline rate was 2.3 percentage points higher than that of the previous month; In December, the new construction area was 161 million m2 in a single month, with a year-on-year decrease of 31.1% and a month on month decrease of 10.1 percentage points. The total completed area of houses in the whole year was 1.014 billion m2, with a year-on-year increase of 11.2%, which was 5.0 percentage points lower than that from January to November. In December, the completed housing area was 327 million m2 in a single month, an increase of 1.9% year-on-year, and the growth rate decreased by 13.5 percentage points month on month.
We believe that the increase of construction area will continue to decrease. In December, the funds in place decreased by nearly 20 percentage points, which further increased the liquidity pressure of real estate enterprises and slowed down the construction. On the other hand, the delivery pressure of real estate enterprises increases, and the completed area is expected to rise steadily.
Mortgage and sales receipts both decreased, and the decline of funds in place in a single month expanded by 12 percentage points: in 2021, the total amount of funds in place in China’s real estate accumulated 20.11 trillion yuan, a year-on-year increase of 4.2%, an increase of 3.0 percentage points lower than that from January to November. In December, the funds in place for real estate development reached 1.78 trillion yuan, a year-on-year decrease of 19.3%, an increase of 12.3 percentage points over the previous month. In other funds, the deposit and advance payment decreased by 25.9% year-on-year, and the decline rate expanded by 9.8 percentage points month on month; Personal mortgage loans decreased by 7.9% year-on-year, and the growth rate decreased by 18.5 percentage points month on month.
In the capital structure in place in December, the decline of deposit and pre-sale funds expanded, and the mortgage growth rate changed from positive to negative, indicating that the demand continued to decline, and the mortgage loan lacked the driving force for sustained growth after centralized investment. On January 16, the national development and Reform Commission proposed to promote the healthy development of housing consumption, and local governments continued to promote urban implementation policies and bank credit relaxation policies. We believe that the marginal loose policy environment is conducive to the improvement of house purchase demand and the bottom recovery of funds in place.
Investment suggestion: we believe that in 2022, the real estate sector will usher in investment opportunities with continuous improvement of policies and continuous optimization of the competition pattern of real estate enterprises. Three main lines are recommended: 1) leading real estate enterprises under the structural differentiation of financing environment: Green City China, Poly Developments And Holdings Group Co.Ltd(600048) , Vanke A; 2) Regional deep ploughing private enterprises: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ; 3) High rated and stable private enterprise: Xuhui holding group.
Risk warning events: the tightening of financing environment exceeds expectations, the tightening of real estate policies exceeds expectations, and the quoted data lags behind or is not timely
