Events
The National Bureau of statistics released the real estate development investment and sales data from January to December 2021.
Sales side: the decline in a single month is expanding, which is difficult to hide the pressure situation. The “price for quantity” action is to be observed
From January to December 2021, the sales area of commercial housing increased by + 1.9% (from January to November + 4.8%) year-on-year, and – 15.6% (November – 14.0%) in a single month in December; The sales amount was + 4.8% (from January to November + 8.5%) on a year-on-year basis, and – 17.8% (November – 16.3%) in a single month in December. Among them, the cumulative residential sales amount was + 5.3% (January to November + 9.3%). In terms of price, from January to December 2021, the national average sales price was – 0.83% (from January to November was – 0.64%) year-on-year, and the growth rate of selling price continued to decline month on month. Looking back, the high-frequency transaction area data of 30 large and medium-sized cities from January 2022 to now (as of January 15) show a year-on-year increase of – 27.1%. The downward pressure on sales is the general trend, and the trend of short-term decline fluctuation needs to observe the strength of “price for volume” of real estate enterprises.
Commencement and completion: the decline of new construction expanded, and the investment increased negatively for four consecutive months
From January to December in 2021, the new construction was – 11.4% (from January to November – 9.1%) on a year-on-year basis, and – 31.1% (November – 21.0%) in a single month in December. From the perspective of transmission from land acquisition to commencement (there is a time lag of 2 ~ 3Q between land acquisition and sales). Considering the implementation of regulatory policies such as “three red lines” and “real estate loan concentration management”, especially in the control of investment amount, there is an indicator constraint that the land acquisition amount / sales amount of the current year shall not exceed 40%, and the land acquisition attitude of real estate enterprises will become more and more cautious. It is worth noting that the “two concentration of land supply” has significantly disturbed the rhythm of land acquisition. When the land acquisition end lags behind, the new construction in 2022 will also fluctuate accordingly. The ability of real estate enterprises to actively adjust the commencement rhythm may be weakened. From January to December, the land transaction and construction area was – 15.5% year-on-year, which also reflects that the tightening of financing has reacted on the land side. The completed area from January to December was + 11.2% year-on-year. From the subjective and objective factors of contract constraints and real estate enterprises’ confirmation of performance through completion and delivery, the completion is expected to continue the growth trend in 2022.
From January to December 2021, the completed investment in real estate development was 4.4% (January to November + 6.0%) year-on-year, and – 13.9% (November – 4.3%) in a single month in December. The cumulative decline was poor in a single month, with negative growth for four consecutive single months. The construction area from January to December was + 6.3% (mom + 1.6%), and the construction area in a single month in December was – 24.7% (mom + 13.5%). Considering that the implementation of the new land auction policy will have a cooling impact on the heat of the land market, as the main part of development investment, the contribution of land investment to development investment may be weakened in the future.
Financing side: negative growth for six consecutive times in a single month compared with the same period last year, and the decline of Chinese loans expanded to – 31.6%
From January to December 2021, the funds in place were + 4.2% (January to November + 7.2%) year on year, and – 19.3% (November – 7.0%) in a single month in December. Structurally, in the single month of December, China’s loans (YoY – 31.6%, previous value – 20.5%), self raised funds (YoY – 9.8%, previous value + 2.1%), collection (down payment + mortgage) (YoY – 21.5%, previous value – 8.0%) [including personal mortgage (YoY – 8.0%, previous value + 10.6%), down payment (YoY – 25.9%, previous value – 16.1%)]. In terms of proportion, sales collection is the main source of funds (accounting for 55.3% in December and 54.5% from January to December). From the cumulative year-on-year point of view, the financing end has achieved an increase of + 4.2% in 2021, but the single month year-on-year growth in December has been negative for six consecutive months, and each subdivided channel has been negative year-on-year.
Investment advice
Following the “three red lines”, the introduction of policies such as “real estate loan concentration management” and “two concentration of land supply” will restrict both ends of supply and demand. The wind direction has not changed, and “stability first” is still the main tone, and the space for large amplification is narrow. At present, the valuation and position of the sector have been at an all-time low. The limited supply and demand at both ends of the industry has exacerbated the disharmony between land acquisition, sales and leverage reduction. Suggestions: (1) steady development type: Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) ; (2) Growth benefit type: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) ; (3) Quality objects of property management: Country Garden service, China Resources Vientiane life, Jinke service, Baolong business, etc.
Risk tips
The real estate regulation policy is becoming stricter, the sales repair is less than expected, and the capital is greatly tightened.
