In addition to the epidemic, real estate is another key issue for the economy this year.

There are three specific reasons why it is crucial.

One reason is that real estate policy has obviously been substantially relaxed.This round of real estate relaxation has gone through three stages.

The first stage is the relaxation of financial and credit policy, the time point was in September last year.. The symposium on real estate financial work was held at the end of September and put forward the "two maintenance", that is, to maintain the stable and healthy development of the real estate market and safeguard the legitimate rights and interests of housing consumers.

The second stage is to relax independently from the bottom up, and the time node is in March this year.. Since March, the second-and third-tier cities represented by Zhengzhou have successively broken through the four-limit policy (purchase restriction / loan restriction / sale restriction / price restriction), especially the intensive adjustment of the purchase and loan restriction policy. it represents that this round of real estate relaxation has entered the second stage of local bottom-up overall relaxation.

The third stage is top-down support.Loose, the time node is in April this year.. The meeting of the Politburo on April 29 proposed to "support all localities to improve real estate policies based on local conditions and support rigid and improved housing demand", giving localities more room for urban policy implementation, and then new first-tier cities such as Hangzhou followed up. The urban energy level and policy scale of relaxing the "four limits" have been further raised.

Second, real estate is vital to the economy.

There have been signs of supply-side "deleveraging" and demand-side "hard landing" of real estate before the epidemic in Shanghai, which has become the main internal cause of economic growth and credit expansion. Whether real estate is stable or not is a vital issue for the economy. The amount of real estate investment reached 13.5% of the total nominal GDP, taking into account the derivative effect of real estate on the service industry and post-cyclical consumption.Account for more than 20%。

From January to April this year, investment in real estate development increased by-2.7% compared with the same period last year, and the area of new construction increased by-26.3%. Since China entered the era of commercial housing in 1999, except for the brief impact of the epidemic in 2020, the growth rate of investment in real estate development in China has never been negative. Given that sales have not yet stabilized, the current growth rate of real estate investment is not only the slowest in history, but is expected to continue to hit a new low. Since the beginning of this year, the growth rate of real estate investment has dropped by more than 10% from the high in 2021, according to the conduction elasticity of 20%.The drag on economic growth is about 2%.

Third, under the impact of the real estate cycle and the epidemic, there are more and more concerns about the ineffectiveness of the policy.

We are in a cyclical position that has not been seen since the housing reform in 1998.

This round of downward pressure on housing demand is unprecedented, with a lower population cycle, a larger gap between cities and weaker expectations of price increases. The peak of total real estate demand is a general trend, which is determined by the population cycle and the level of urbanization. There is uncertainty about how long and to what extent the stimulus policy can improve demand. The repeated impact of the epidemic on residents' income and expectations has brought new uncertainty.

Under the background of no speculation in housing, the long-term expectations of property buyers on the return on investment in housing have changed, and the area of real estate sales can not return to the past; under the background of deleveraging by real estate enterprises, developers' long-term expectations of the gross profit margin of commercial development have also changed. the leverage and turnover of real estate development investment are not the same as in the past. According to central bank data, the balance of real estate development loans grew by only 1.1% in the first quarter of this year compared with the same period last year, and the medium-and long-term loans for new residents in February and April were negative for the first time in history.Housing enterprises and residents have entered the era of deleveraging.。

Since March, more and more second-tier cities have relaxed part of the "four limits" policy.

According to incomplete statistics, the second-and third-tier cities that partially relaxed the "four limits" in March were Zhengzhou, Ningbo, Qingdao, Fuzhou, Kunming, Shenyang, Guangxi, and Harbin, while the second-and third-tier cities that followed the relaxation in April were Nanjing, Suzhou, Wuxi, Foshan, Dongguan, Guiyang, Lanzhou, Qinhuangdao and so on.

But the reality is that while more and more cities have voluntarily relaxed property restrictions since March, property sales have been hit by the epidemic and the data continue to weaken.

The cumulative sales area of commercial housing in April was-20.9% compared with the same period last year, the growth rate was 7.1% lower than that in March; the sales volume of the top 100 real estate enterprises in April was-59.0% year-on-year, which was 6.2% lower than that in March; and the transaction volume in April 30 was-54% compared with the same period in March. The growth rate is 8% lower than that in March, but there are signs of stabilization in the first half of May compared with the same period last year.

Therefore, to observe the usefulness of real estate relaxation, it is also necessary to distinguish the impact of epidemic control.

According to incomplete statistics, there have been varying degrees of closure and control measures (city closure, suspension of classes, suspension of business, traffic control, etc.) in 80 prefecture-level cities and counties and the whole city since March, and the control areas account for up to 16% of the national GDP. Among the cities that relaxed the "four limits" of real estate from March to April, cities that may affect real estate sales due to epidemic control measures are Zhengzhou, Suzhou, Wuxi, Nanjing, Shenyang, Harbin, Qinhuangdao (Funing District), Tianjin and Xi'an.

As a result, there are only Ningbo, Qingdao (except Laixi), Fuzhou, Kunming, Foshan, Dongguan, Guiyang, Lanzhou, Zhangjiakou and Yichang that partially relaxed the "four restrictions" of real estate from March to April, leaving only Ningbo, Qingdao (except Laixi). These cities form a limited sample to observe whether real estate relaxation is useful.

We divided the cities across the country into the above three samples according to "relaxing the four-limit policy on real estate" and "blocking the outbreak of the epidemic". Comparing these three samples, we find that:

first, observe sample 1 + sample 2: inAll the "four limits" relaxed second-tier citiesWith the exception of Fuzhou and Foshan, the average price of commercial housing in most cities in April was higher than that in February or March, that is,There is a turning point in the month-to-month meaning of house prices.. From March to April, the average price of relaxed cities is also higher than that of all second-tier cities. This shows that the relaxation of the "four limits" can still play some role in stabilizing and rebounding house prices in second-tier cities.

Second, observe sample 1: inRelaxing cities with "four limits" without epidemic controlIn most cities, the growth rate of commercial housing sales area rebounded compared with the same period last year.There is an inflection point of year-on-year significance of sales.For example, Ningbo, Lanzhou, Foshan, Fuzhou, Dongguan and so on, but the growth rate of sales area in Qingdao and Changsha continued to decline after relaxation.

Third, observation sample 2: in"four limits" to relax cities with epidemic situation controlIn April, the growth rate of commercial housing sales area declined year-on-year. Among them, Zhengzhou, Nanjing, Suzhou and Xi'an had a rebound in sales before the control of the epidemic, but fell sharply in the month of closure. Compare sample 1, explainThe probability of sales has been affected by the epidemic.。

FourthObservation sample 3: the national house price data has been initially improved. Looking at the second-hand house price index of 70 large and medium-sized cities, monetary relaxation has led to a month-on-month rise in house prices in first-tier cities for four consecutive months.The superposition of the banner effect of price increases in first-tier cities has been relaxed due to urban policies, and the month-on-month decline in house prices in second-and third-tier cities has also narrowed.。

Judging from the above findings,With or without the impact of epidemic control, the high probability of relaxing the "four limits" can play some role in the month-on-month rebound of house prices.。In the absence of the impact of epidemic control, real estate sales are more likely to pick up year-on-year after relaxing the "four limits".. Therefore, if the second half of the year through the normalization of nucleic acid testing and flow tracking can reduce the probability of epidemic control.The positive month-on-month growth rate of house prices and the rebound in the growth rate of real estate sales area compared with the same period last year are still worthy of our expectation.。

According to the historical law, if the sales data are observed to stabilize around the middle of the year and superimpose the supply-side relief policy, the growth rate of real estate investment is also expected to stabilize in the second half of this year.It is of great significance to steady economic growth and the reconstruction of market confidence this year.