Weekly view:
National Conference on housing and urban rural development: on January 20, the National Conference on housing and urban rural development was held in Beijing. It was proposed to adhere to the general tone of seeking progress while maintaining stability in 2022 and focus on “increasing confidence, preventing risks, stabilizing growth, promoting reform and strengthening the team”. Among them, “risk prevention” emphasizes putting risk prevention and control in a more prominent position; “Steady growth” emphasizes the full release of residents’ housing demand.
Risk prevention is mainly to prevent the risk of overdue delivery of risk real estate enterprises. In order to alleviate the overall liquidity pressure of the industry, we expect that the government’s supervision of pre-sale funds of real estate enterprises with good credit and stable operation is expected to be loosened, but the supervision of risk real estate enterprises is strengthened, and the sales collection ability among real estate enterprises is further differentiated. We believe that the leading real estate enterprises with the advantages of financing and sales collection will be stronger, while the risky real estate enterprises will accelerate the liquidation and the industry structure will continue to be optimized.
The LPR over 5 years was lowered by 5 basis points: on January 20, the central bank announced the quoted interest rate (LPR) of the loan market. Among them, the 1-year LPR was 3.7%; The five-year LPR was 4.6%, down 5 basis points from the previous month, the first reduction since April 2020.
The decline of LPR for 5 years and above can drive the decline of mortgage loan interest rate, so as to reduce consumers’ house purchase cost and stimulate house purchase demand. We believe that under the background of reducing mortgage costs, the speed of mortgage delivery will continue to increase, driving the reversal and recovery of market outlook, so as to achieve the goal of steady growth.
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) , China Vanke Co.Ltd(000002) ; 2) Regional deep ploughing private enterprises: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ; 3) High rated and stable private enterprises: Xuhui holding group, Seazen Holdings Co.Ltd(601155) .
Industry tracking
Sales review (01.15-01.21): the total transaction area of 33 key monitoring cities was 3.498 million m2, down 14.3% from last week; In 2022, a total of 10.754 million square meters were sold, with a cumulative year-on-year decrease of 32.0%. Among them, 669000 square meters were sold in first tier cities, down 16.2% from last week. In 2022, 2272000 square meters were sold, down 16.1% year-on-year; Second tier cities sold 1.989 million square meters, down 14.1% from last week, and 5.795 million square meters in 2022, down 11.0% year-on-year; The third tier cities sold 840000 square meters, down 13.2% from last week. In 2022, a total of 2.687 million square meters were sold, down 59.2% year-on-year.
Land supply (01.10-01.16): the planned construction area of land and homestead supply in Baicheng is 410000 m2. In 2022, the cumulative supply of planned construction area is 5.86 million m2, with a cumulative year-on-year decrease of 88.4% and a supply-demand ratio of 0.62.
In terms of land listing price, the average listing floor price of land supplied by Baicheng is 4798 yuan / m2, and the average listing price in recent four weeks is 7038 yuan / m2, with a month on month increase of 20.6% and a year-on-year increase of 71.4%.
Land transaction (01.10-01.16): the planned construction area of residential land in Baicheng is 190000 m3, with a cumulative transaction of 9.52 million m2 in 2022, a cumulative year-on-year decrease of 83.4%.
In terms of land transaction floor price and premium rate, the average transaction floor price of residential land in Baicheng was 1493 yuan / m2, a month on month decrease of 52.1%, a year-on-year decrease of 64.6%, and the overall premium rate was 0.0%. In 2022, the average floor price was 4236 yuan / m2, a year-on-year decrease of 4.4%, and the premium rate was 3.3%, a decrease of 10.6 percentage points compared with the same period last year.
Risk warning event: the financing environment is tighter than expected; The regulatory policy was tightened more than expected.
