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观点 | 地产“四限”的可能放开路径和影响

Opinion | The “Four Limits” of Real Estate May Liberalize Paths and Influences

中信證券研究 ·  May 16, 2022 13:40

Source: CITIC study

Author: Chen Cong, Zhang Guoguo, Li Zongru

Original title: real Estate | possible release path and influence of "four limits"

At present, the growth of the real estate market is not as sustained as in 2014, but the policy momentum is similar to that in the second half of 2014, the adjustment of the competitive landscape is more than that in 2014, and the duration of land market opportunities is likely to exceed that in 2014.

CITIC believes that there is sufficient space for policy implementation on the demand side of the real estate market. The relaxation of purchase restrictions, loan restrictions, price restrictions and sales restrictions may promote the lowering of the threshold for home purchase and the decline in the cost of home purchase.

In this paper, the possible release path and influence of the four limits are analyzed in detail. CITIC said that he believes that the policy will contribute to the improvement of the competitive environment in the development industry and the improvement of the profitability of enterprises in the future, as well as the improvement of channel penetration and the resumption of the housing chain.

▍ demand-side policy faces long-term limitations and short-term space.

We believe that the space for long-end LPR decline is limited, and the overall growth space for real estate development investment is also limited. However, there is a lot of room for the decline of mortgage interest rates, and there is also a lot of room for the liberalization of demand-side measures such as purchase restrictions, loan restrictions, sales restrictions, price restrictions and so on.

The implementation of ▍ policies due to the city is not equal to insufficient efforts, and demand support policies are expected to occur frequently.

The Politburo meeting encouraged city-specific policies to support rigid demand and improved housing demand. We believe that the practice of urban policy (rather than national unity) has nothing to do with the strength of demand support. All localities not only have more room for policy liberalization, but also have a more urgent need to deal with delivery, land transfer, development investment and other issues. Based on the experience of 2014, it usually takes 2-3 months from the first city to introduce loose policy to a large number of cities to follow up.

▍ housing and loan standards change, will reduce the purchase cost and threshold.

Purchase restrictions have been relaxed, taking into account support for the property market and other policy considerations. At present, many localities have adopted to change the identification standards of the first suite and reduce the local down payment and interest rate requirements, which constitute the relaxation of loan restrictions. We believe that the adjustment of loan restrictions will effectively lower the threshold for residents to buy houses and protect the demand for improvement. Except for a few third-and fourth-tier cities to directly relax the purchase restrictions, most second-tier cities adjust the purchase restrictions, giving qualified talents or multiple families the qualification to purchase houses, and giving families with stock houses to rent more qualifications to buy houses. Such practices have not only stimulated demand, but also achieved other policy objectives.

The loosening of ▍ price restrictions will help restore the profitability of development enterprises and liberalize sales restrictions to promote demand for housing in core cities.

Various localities have liberalized the price limits on new housing and second-hand transfer guidance prices to varying degrees, which will help promote the profit margins of development enterprises to obtain land in the core cities, increase the willingness of development enterprises to invest, and also make development enterprises focus more on the core cities. Transfer guidance price adjustment and restrictions on the release of varying degrees, it may promote the resumption of the housing chain. In addition, the narrowing of the first-and second-hand price gap helps to improve the channel permeability.

▍ risk factors:

The competition pattern of the industry has changed dramatically, and the risk of shrinking the assets of some companies. Some regional markets continue to have downside risks.

▍ Investment advice:

We believe that the current growth sustainability of the real estate market is not as sustained as in 2014, but the policy momentum is similar to that in the second half of 2014, the adjustment of the competitive landscape is more than 2014, and the duration of land market opportunities is likely to exceed 2014. We recommend development enterprises with both credit and efficiency, including Poly Development, Vanke A / China Vanke, Jindi Group, China Merchants Shekou, Greentown China, Huafa shares, Longfor Group, China Resources Land, Binjiang Group and Midea Real Estate. We are also optimistic that we will obviously benefit from the gradual liberalization of the four limits, with the core competitiveness of the real estate service platform, namely KE Holdings Inc..

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