CICC said that the current real estate policy is working harder than previous cycles, aggregate demand is stabilizing in stages accordingly, and the market's confidence that the inflection point of the real estate cycle will eventually arrive has increased markedly.
The Zhitong Finance App learned that on June 25, the real estate industry faced multiple catalysts. CICC said that the current real estate policy is being strengthened at an intensity exceeding previous cycles, aggregate demand is stabilizing in stages accordingly, and the market's confidence that the inflection point of the real estate cycle will eventually arrive has increased significantly. Currently, the market is in a stage where gaming policies continue to gain strength while waiting for local fundamentals to stabilize. In this stage, volatile trading opportunities may appear frequently, and investment must be taken by chance. Related concept stocks: Greentown China (03900), China Resources Land (01109), Yuexiu Real Estate (00123), China Resources Vientiane Life (01209), etc.
On June 25, the real estate industry welcomed multiple catalysts:
1) The Ministry of Housing and Construction and the General Financial Supervisory Authority recently held a video conference on housing guarantee policy training. The conference emphasized that the housing delivery process is an important measure to implement the central government's decisions and arrangements. It is a concrete practice of implementing the people-centered idea of development, and is currently the top priority in promoting the stable and healthy development of the real estate market. All regions should vigorously, orderly and effectively push forward all aspects of housing handover work.
2) The Ministry of Natural Resources is studying how to revitalize the policy of leasing undeveloped land and support local governments to take back and buy vacant land. Regarding land collection funds, the Ministry of Natural Resources plans to provide financial support to local governments through special bonds, but requires local governments to do what they can to resolutely avoid adding hidden debts to local governments.
3) Suzhou introduced a new property market policy. Among them, it is proposed that non-Suzhou domiciled persons who actually live within the administrative area of the city can apply for a household account to move into the housing they own or have purchased, and their spouse, unmarried children, and parents (over the legal retirement age or who have completed retirement procedures) can apply for account transfer.
Also, on the same day, many places issued real estate support policies. These include: Yueyang, Hunan: The maximum subsidy for buying a new home is 20,000 yuan, increasing the incentives for families with three children or more; the Changchun Housing Provident Fund loan policy is to be adjusted to increase the maximum amount of a single loan in stages; the maximum loan amount for personal housing in Jiangsu Nantong is adjusted from 500,000 yuan/person to 600,000 yuan/person; the Changchun Housing Provident Fund loan policy is to be adjusted to increase the maximum amount of a single loan in stages, etc.
Earlier, on May 28, both Guangzhou and Shenzhen announced a new real estate policy. Shenzhen mainly adjusted the down payment ratio and mortgage interest rate. Guangzhou further optimized its real estate policy in all aspects of purchase restrictions, loan restrictions, encouragement of trade-in, and storage, etc., and took the lead among first-tier cities. Guangshen followed Shanghai's optimization of real estate policies on the same day, and the “inventory removal” campaign of first-tier cities accelerated. According to Wind data, as of May 26, the sales area of new homes in Guangzhou/Shenzhen was -31% year-on-year in May. Currently, the first-tier cities Shanghai, Guangzhou and Shenzhen have implemented the 517 New Deal to optimize real estate policies, which is expected to continue to stabilize market expectations.
According to the official website data of various real estate agencies, recently (5.27-6.2), the sales volume of 77 sample cities increased 0.2% month-on-month, up 9.5% from before the New Deal (5.11-5.17). The total volume of second-hand housing transactions in key cities such as Beijing, Shenzhen, Guangzhou, and Hangzhou in the past three weeks was -1.1%/+2.9%/+8.5%, respectively, and sales increased week by week.
Meanwhile, in May, the sales performance of TOP50 real estate companies continued to improve marginally after March. Sales fell 31% year on year, and the decline narrowed by 16 pcts, showing a weak recovery trend. According to Kerui data, the monthly sales volume of TOP50 real estate companies in May was 219.6 billion yuan, down 31% from the previous year, and the decline narrowed by 16 pcts. Among them, the TOP10 real estate companies accounted for 59% of sales, higher than the average of 55% for the full year of 2023. The resilience of leading housing enterprises continues to be highlighted.
Guotai Junan believes that in June, as policies continue to ferment, residents and the government will make simultaneous efforts to cooperate with housing companies' mid-year promotions, which is expected to bring about a further improvement in sales data. Looking ahead to subsequent policies, considering that what currently restricts residents more is the monthly repayment amount, and the more important policy is the interest rate policy, so the pace of interest rate adjustments and the evolution of collection and storage policies will be the core guidelines for predicting subsequent sales indicators.
CICC said that the current real estate policy is working harder than previous cycles, aggregate demand is stabilizing in stages accordingly, and the market's confidence that the inflection point of the real estate cycle will eventually arrive has increased markedly. However, it is also necessary to recognize that under the new situation in the real estate industry, the structure of second-hand housing evolves at an accelerated pace, the total supply pressure for new and second-hand housing is prominent, the inertia of the real estate cycle is increasing, and we should also have sufficient patience while waiting for the inflection point to arrive. Currently, the market is in a stage where gaming policies continue to gain strength, while waiting for local fundamentals to stabilize. In this stage, volatile trading opportunities may appear frequently. Investments must take the opportunity to choose relevant targets with high valuations and high flexibility on the management side.
Related concept stocks:
Greentown China: In December 2023, Greentown Group's self-funded project sold 5,267 units, with a sales area of about 750,000 square meters. The monthly sales amount was approximately RMB 25.1 billion, and the average sales price was approximately RMB 33,624 per square meter. From January to December 2023, Greentown Group obtained a contract sales area of about 6.86 million square meters, with a contract sales amount of approximately RMB 194.3 billion; of this, the equity amount attributable to Greentown Group was approximately RMB 127.6 billion. On December 31, 2023, the total amount of subscription agreements and untransferred sales contracts was approximately RMB 4.1 billion, of which the equity amount attributable to Greentown Group was approximately RMB 3.3 billion.
China Resources Land: In one month ending December 31, 2023, the Group achieved a total contract sales amount of about RMB 21.01 billion and a total contract sales area of about 1,012,800 square meters. In the same period, the equity contract sales amount and equity contract sales floor area were approximately RMB 12.50 billion and 625,000 square meters respectively.
Yuexiu Real Estate: From January to December 2023, the company's cumulative contract sales amount (along with contract sales for joint ventures and joint venture projects) was approximately RMB 142.03 billion, up about 13.6% year on year. The cumulative contract sales area was about 4.458 million square meters, up about 7.5% year on year. The cumulative contract sales amount accounts for about 107.6% of the 2023 contract sales target of RMB 132 billion.
China Resources Vientiane Life: In the past three years, China Resources Vientiane Life has grown rapidly in terms of management scale, ranking first in the industry. As of mid-2023, China Resources Vientiane Life had a total contract area of 380 million square meters and a total managed area of 325 million square meters, up 153% and 189% respectively from the time of listing at the end of 2020. According to monthly data from Chinese property service companies of the China Index Research Institute, since the second half of 2023, China Resources Vientiane Life has basically remained among the top four in the industry in terms of contract area added in a single month; a total of 38.54 million square meters were added from July to November 2023, which means that its total contract area has now exceeded 400 million square meters.