Into the cold winter, a rare warm wind blowing, how to freeze the crowd.
On December 13, 2018, the real estate sector changed its declining state and closed the market higher. A-share real estate sector, the traditional four major real estate enterprises "insurance Wanjin" led the increase. In the Hong Kong stock sector, property companies with a market capitalization of more than HK $50 billion, such as Vanke, Rongchuang and Shimao, all rose more than 5 per cent.
The general rise in the real estate sector stems from the market's loosening expectations for the central government's real estate policy. On the evening of December 12, the NDRC issued the Circular on supporting the Direct financing of High-quality Enterprises to further enhance the capacity of Corporate Bonds to serve the entity economy.
Most people in the notice focused on real estate enterprises that meet the triple-A credit rating and have total assets of more than 150 billion and revenue of more than 30 billion, supporting the issuance of high-quality corporate bonds for financing.Among themAllowing borrowing to repay the old and allowing bond issuance to exceed 40% of net assets also means that short-term financing and ultra-short-term financing may also include random issuance of winning votes, not counting the caliber.
This year increasingly fell into financing difficulties in the housing enterprises, in line with the standards of high-quality enterprises, is undoubtedly a dose of good medicine to ease the tension of the capital chain.
We should know that real estate bond issuance this year is significantly higher than that of last year. Real estate bond issuance in the first 11 months was close to 358 billion yuan, compared with 190 billion yuan for the whole of last year, nearly doubling the issuance volume.
In 2018, real estate bonds entered the peak of repayment, with a sharp increase in maturity. Although bond issuance increased significantly compared with last year, it was mainly used to borrow new money to pay off the old. Net financing remained in the doldrums, with a cumulative total of only 105.9 billion so far this year, a decrease of 23.2 billion compared with the same period last year.
In other words, it is mainly to borrow the new to repay the old, but the net financing has decreased compared with the same period last year, and the real estate enterprises have less money than last year, and life is more difficult.
However, before this warm wind arrived, the NDRC clarified it.
The National Development and Reform Commission said that it is resolute, consistent and very strict in implementing the decisions and arrangements of the CPC Central Committee and the State Council on real estate regulation and control, which is also consistent in terms of corporate bond financing.According to the spirit of the central government on the construction of the long-term mechanism of real estate, at present, the corporate bonds of the National Development and Reform Commission only support projects in limited areas such as shed reform, indemnificatory housing and rental housing, but not commercial real estate projects. In recent years, corporate bonds in the implementation of national real estate regulation and control policy has not changed.
So is the real estate policy loose or tight?
First of all, we need to make it clear that the goal of policy regulation is to stabilize house prices.
1. If it is too loose, let us go back to the loose policy of 2014-2015, which effectively reversed the short-term economic downturn, but also led to a sustained rise in overall macroeconomic leverage and a bubble in asset prices.
According to BIS, the debt ratio of China's residential sector in the first quarter of 2018 is close to 50 per cent, far higher than the average of 35 per cent in emerging market countries. Taking into account personal housing provident fund loans, this ratio will be close to 55 per cent. Taking into account the income situation, the debt level of the residential sector has exceeded that of developed countries.From the point of view of the proportion of household debt to disposable income, the debt level of residential sector in China has exceeded that of developed countries. At present, the proportion of residents' debt to disposable income in China is close to 90%, which is much higher than that of developed countries such as France, Germany and Spain, and is also close to that of the United States, considering many private financing channels in China, the actual leverage ratio of residents may be higher.
At present, the space for Chinese residents to increase leverage has been very limited, and the way of relying on large-scale borrowing by residents to stimulate the economy has been withdrawn.
2. What if the regulation is too strict? Too much decline in house prices can also lead to systemic risks.
We know that the financial crisis broke out in the United States in 2008, and the trigger of this crisis was the subprime crisis. From 2000 to 2003, low interest rates in the United States for many years encouraged residents to borrow money to buy houses. American house prices began to rise and gradually began to bubble. Since 2004, the Federal Reserve has raised interest rates several times, raising interest rates to 5.25%. As a result, the pressure on residents to buy houses and the costs of real estate speculators have been intensified, and house prices have plummeted. Residents can not repay bank loans, bank loans and auction loan collateral, resulting in a vicious circle of house prices, bank loans can not be recovered, forming a large number of bad debts, some are forced to go bankrupt, and finally brew a financial crisis.
In 2008, the Fed calculated that financial institutions such as banks could withstand a 23% decline in house prices, but in fact, prices fell by more than 13% on a massive trend, which Fannie Mae and Freddie Mac could not hold up. This is a process of accelerating and aggravating the negative feedback effect on the economy, and the formation of the momentum is difficult to control.
Therefore, in the dilemma, the policy can only wander between loosening and tightening. From the present point of view, there is a greater possibility of loosening in the future.
At present, there are obvious signs of cooling in the national land market. On the one hand, it is reflected in the increase of unsold land. According to statistics from the Central Plains Real Estate Research Center, as of November 29, the total number of residential land in first-and second-tier cities reached 282, the highest in the past six years and an increase of 143% compared with the same period last year. During the year, there were 944 residential land in third-and fourth-tier cities, compared with 766 in the same period in 2017, and the number of residential land in third-and fourth-tier cities increased by 23% in 2018.
On the other hand, the premium rate of land transaction continues to decline, and the number of homesteads with zero premium increases. Data show that a total of 12828 residential land parcels were sold at zero premium across the country, accounting for 57.3% of the total number of residential land transactions, an increase of 2.0 percentage points over the same period last year. While the supply of land in first-and second-tier cities ushered in the peak, land prices continued to decline, even if the residential land transactions, basically also based on the floor price.
During the ten-year real estate reshuffle period, the industry leader is the king.
The strong recovery in the housing market since the end of 2014 has increased investors' concerns about the long-term prospects of the industry, and the collapse seems to be imminent. What we need to see clearly based on syndrome differentiation is:On the one hand,The speed of urbanization is slowing down, the profit margin of the industry is declining in the past, and the era of taking land and making money is gone forever.On the other handWe are still 8-10 years away from the saturation range of 70% urbanization, and the most critical variable supporting the industry (urbanization) is still "alive".
Financing is the lifeline of real estate enterprises. In the past, the tension of the capital chain became Evergrande, and Shunchi, which did not survive, was acquired cheaply by path infrastructure. China Evergrande Group issued a total of $1.8 billion in three issues in October this year, with a comprehensive interest cost of more than 15%, and gave priority to subscribing for 1 billion. The leading housing enterprises are still difficult, and the challenges faced by small and medium-sized housing enterprises are even greater. When the policy resources in the real estate industry tilt to high-quality leaders, the possibility of accelerating integration is very great.
In the first 10 months of 2018, 10 housing companies were declared bankrupt because of a broken capital chain. Most of them come from hot provinces and cities, including 4 in Chongqing (real estate), 2 in Anhui and 1 in Guangzhou. According to incomplete statistics, from January to October 2018, seven real estate enterprises have "disappeared" in the ranking of the real estate industry as a result of transformation or restructuring, such as Baoneng and Yinyi are transforming the automobile manufacturing industry.
But the leading housing enterprises go to the other extreme, such as Vanke. Following the acquisition of Huaxia Happiness, HNA some projects and shares in the company, on November 9, Vanke acquired shares in five companies under Jiakai City. According to incomplete statistics, Vanke has made at least 14 acquisitions involving projects, equity or assets since the beginning of 2018, at a cost of more than 23 billion yuan. In addition, Vanke is also quite active in acquiring land. In the first 10 months of this year, it added a total of 205projects, with a new equity construction area of 24.5374 million square meters, with a total investment of 133.817 billion yuan. Vanke's asset-liability ratio correspondingly rose to 84.9%, the highest in four years.
Under the cold winter, some of the same industry can not bear its hardship, while others can go against the trend. At a meeting held by Vanke in the autumn, Mr. Yu Liang, chairman of Vanke, shouted that the goal was to "live". Now it seems that through the hail of bullets, some enterprises may not only survive, but also grow stronger.
(Wen / Hua Guang Charlie)
