Source: Broker China Author: Zhang Da
In May, the sales performance of the top 100 real estate companies increased sequentially.
According to data from the Kerui Research Institute, the sales transaction amount of the top 100 housing enterprises increased by 3.4% month-on-month and decreased by 33.6% year-on-year in May.
On a cumulative basis, data from the China Index Research Institute shows that from January to May, the total sales of the top 100 housing enterprises were 1618.45 billion yuan, and the year-on-year decline has been narrowing for four consecutive months.
Industry insiders believe that the implementation of the “May 17” package of real estate policies has boosted market confidence, market activity is expected to pick up, sales of housing enterprises will improve, total transactions may increase steadily in June, and the absolute volume is expected to reach a new high during the year.
Performance increased month-on-month, and the year-on-year decline narrowed
According to data from the Kerry Research Center, in May, the top 100 real estate companies achieved sales transaction amounts of 322.41 billion yuan, an increase of 3.4% month-on-month and a year-on-year decrease of 33.6%, and the monthly performance scale continued to remain at a historically low level. In terms of cumulative performance, the top 100 housing enterprises achieved sales transaction amount of 1413.37 billion yuan from January to May, a year-on-year decrease of 44.3%, and the decline narrowed by 2.5 percentage points.
Data from the China Index Research Institute also shows that from January to May, the total sales of the top 100 housing enterprises were 1618.45 billion yuan. Although the year-on-year decline continued to narrow compared to the previous month, it has been narrowing for four consecutive months. Typical companies such as Greentown China and China Construction Yipin saw strong sales growth in May.
Looking at transactions in key cities, data from the Kerry Research Center shows that in May, transactions in the 30 key cities increased slightly by 4% compared to April. Overall, it was still higher than the monthly average of 23% in the first quarter, and the market fluctuated at a low level. Cumulative transactions in the first five months fell 44% year on year, and the decline narrowed by 2 percentage points.
Among them, the popularity of first-tier cities declined, falling sharply from month to month. In Beijing alone, transactions increased slightly by 1% month-on-month due to supply volume. The four first-tier cities traded 1.64 million square meters in May, down 34% and 6%, respectively. There was a steady decline in Shanghai, Guangzhou, and Shenzhen. Among them, Shanghai saw the most significant decline. At the end of May, Shanghai introduced a new policy to benefit the property market, but in the short term, it only brought an increase in the number of visitors, which has not yet been reflected in the transaction end.
Transactions in second- and third-tier cities slowly recovered, with a slight increase of 6% month-on-month and a year-on-year decline of 34%. Among them, core second-tier cities such as Xi'an and Chengdu, which are hot spots in the short term, had the highest transaction volume in May, and continued to increase month-on-month. Most cities, such as Wuhan, Hangzhou, Hefei, and Tianjin, are still in a period of steady demand recovery. Transactions are increasing month-on-month and declining year-on-year, and there is a strong wait-and-see attitude among customers. Some second- and third-tier cities, such as Nanjing, Suzhou, Chongqing, Fuzhou, Changchun, Jiaxing, Wuxi, and Zhuhai, showed a steady recovery. Transactions fell year on year and month on month in May, continuing to bottom out.
The total volume of transactions in June may hit a new high during the year
On May 17, a video conference was held on how to effectively guarantee housing delivery across the country. The supervisory authorities successively implemented a number of measures, including lowering the lower limit of the down payment ratio and abolishing the lower interest rate limits for first and second home loans.
The China Index Research Institute pointed out that the implementation of the “package” policy has clearly driven market sentiment, and there has been a recovery in the number of new home visits and second-hand housing sales in many cities. By comparing popular projects in some hot cities in May, the main advantages that drive sales are good location, good products, and high cost performance.
Looking ahead to the future market, the China Index Research Institute believes that the implementation of the “May 17” package of real estate policies shows the central government's determination to “stabilize real estate” and has clearly boosted market confidence. As core Tier 1 and 2 cities gradually implement various measures, the market is expected to enter the implementation period of policy effects. At the same time, housing enterprises will also enter the performance sprint stage for the first half of the year in June, and market activity is expected to pick up.
The China Index Research Institute also pointed out that the pace of market recovery still depends on changes in residents' income expectations. At the same time, if local state-owned enterprises collect and store unsold commercial housing and other policies to absorb stock can be implemented relatively quickly, it will also play a positive role in improving the cash flow of housing enterprises and mitigating industry risks. It is expected that with the simultaneous efforts of both supply and demand sides to bring practical financial support and sales support to the real estate industry, sales of housing enterprises will improve.
The Kerry Research Center also believes that June coincides with the mid-year sprint point for housing enterprises, and marketing efforts are bound to increase. In addition, after the real estate briefing by the four ministries and commissions on May 17, the core Tier 1 and 2 cities successively lowered down payment ratios and loan interest rates, and the easing policies of the first-tier cities of Shanghai, Shenzhen, and Guangzhou were further strengthened at the end of May. It is expected that the total volume of transactions in June may increase steadily, and the absolute volume is expected to reach a new high during the year. However, based on last year's high base, the year-on-year trend will continue to decline.
Looking at each city, the Kerry Research Center believes that the overall popularity of first-tier cities is better than that of second-tier and third-tier cities, and the “strong are strong” situation is expected to continue: for the hot spots of Chengdu and Xi'an, the market is resilient in the short term, and even if local heat cools down, the overall market is expected to operate at a high level. Transactions in Shanghai, Guangzhou, and Shenzhen are expected to stop falling in the short term due to favorable New Deal support. Projects with excellent facilities and products in the core regions will also maintain a high removal rate, and most projects on the periphery of the city may heat up slightly. For most weak second-tier and third-tier and fourth-tier cities, market popularity is still yet to be transmitted by core Tier 1 and 2 cities. However, the current market has basically reached the end, and the decline is irresistible. The low level of fluctuation may continue in June.
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