In the third quarter, the pace of recovery of the national real estate market accelerated, and the transaction volume and transaction price of commercial housing in key cities made a smooth transition. At the same time, the regulatory policies in the industry have been continuously introduced, especially for the continuous implementation of the "three red lines" fund regulatory policies for real estate enterprises. The industry expects that the differentiation within the industry will intensify in the fourth quarter, and the phenomenon of price-for-quantity exchange will further increase.
The overall recovery of the residential market accelerated in the third quarter.
Recently, the sales data of commercial housing in 40 monitored cities in China released by Yihan think tank shows that the sales area of commercial housing in 40 cities in September was 24.58 million square meters, up from the same period last year, accounting for 12.4% and 2.3% respectively, and the transaction volume increased steadily.
According to the analysis of Yihan think tank, on the whole, the residential market in the monitored cities achieved positive growth in September compared with the previous month, and the market heat recovered slightly compared with August. Combined with the industry policy, it is expected that the overall performance of the residential market will be relatively stable throughout the year, and it is difficult to have large fluctuations, and more is the self-adjustment of the market.
"Golden September and Silver 10" is considered as the traditional performance development period of real estate enterprises. From January to September, 2020, the performance of real estate enterprises in each echelon has a greater impact, and the sales performance of real estate enterprises in different echelons has achieved different degrees of growth. Among them, the performance threshold of TOP50 housing enterprises has the highest increase, reaching 15%.
It is worth noting that in the third quarter, the pace of recovery of the commercial housing market in key cities accelerated. According to the statistics of China Index Academy, in the third quarter, the overall transaction scale of commercial housing in 100 cities nationwide reached the highest level since 2017, with a year-on-year increase of about 10%, especially in July-August, driven by the continuous active push of real estate enterprises, the effect of superposition policy has not yet been obvious, the enthusiasm for demand release remained high, the off-season effect was obviously weakened, and the transaction scale continued to the high level in June.
In September, on the one hand, the demand gradually stabilized after a sustained and rapid release in the previous months; On the other hand, the continuous tightening of property market regulation has further weakened the enthusiasm for demand release. According to preliminary estimates, the year-on-year growth rate of commercial housing transactions in 50 key cities in September has narrowed sharply to around 4%, and the absolute scale has dropped from June to August.
In terms of housing prices, the prices of new residential buildings in 100 cities nationwide rose steadily in September, and the cumulative increase in the third quarter was larger than that in the same period last year. According to the survey data of 100 cities in China by the Central Reference Institute, in September, the average price of new residential buildings in 100 cities was 15,643 yuan/square meter, up 0.24% from the previous month, and the increase rate was within 0.6% for 39 consecutive months.
Since July this year, the tightening trend of real estate regulation and control policies has been obvious, and many places have been regulated and upgraded. Buyers’ home ownership sentiment has become more rational and market expectations have become more stable. In the first three quarters, the price of new residential buildings in Baicheng increased by 2.46%, which was 0.08 percentage point lower than that in the same period of last year, and increased by 1.18% in the third quarter, which was slightly larger than that in the second quarter and the same period of last year.
In view of the overall situation of the real estate market in the third quarter, the analysis of the Central Reference Institute pointed out that during the period, driven by the active promotion of housing enterprises, the transaction still maintained a good momentum, the off-season effect of the market was obviously weakened, the transaction scale of commercial housing in key cities increased rapidly, and the price of new housing also rose steadily; At the same time, some unstable expectations are gradually accumulating in hot cities.
Tightening control policies and increasing cities.
In September, several local cities issued regulation policies to regulate the real estate market in terms of purchase restriction, loan restriction and sales restriction, including Dongguan, Hangzhou, Shenyang, Changzhou and Chengdu. On the whole, the regulation policies of cities are generally adjusted moderately on the basis of previous policies; The overall performance is based on the policy of the city, focusing on stability to prevent large fluctuations in the market; Adhere to the policy tone of "the house is for living, not for speculation".
In fact, since July, Hangzhou, Ningbo, Shenzhen and other cities have tightened their control policies. Local policies have guaranteed income and stabilized the expectations of the real estate market from different aspects. Judging from the content of regulation, while strengthening market supervision, the policies issued by various localities also clarify the policy orientation of high-level talents and families without houses giving priority to buying houses, focusing more on ensuring the housing needs of just-needed groups and curbing investment speculation demand.
However, compared with the loose monetary environment in the first half of the year and the introduction of real estate support policies in many places, the regulation and control policies of real estate on industry fund supervision in the third quarter have turned. The central government has held many meetings to emphasize that the orientation of "housing and not speculating" will remain unchanged, and real estate will not be used as a short-term means to stimulate the economy, and regulatory measures will be deployed from various aspects. The regulatory authorities set up "three red lines" to limit the financing of real estate enterprises, prevent and resolve real estate financial risks, and promote the healthy development of the industry.
Based on this, the real estate market is expected to stabilize in the third quarter, and the prices of new and second-hand houses have risen steadily as a whole. Especially since September, the regulatory policies have gradually become effective, and the demand has been attributed to rationality; Under the strong financial supervision, housing enterprises are more cautious in taking land, and the heat of the land market has declined.
Yihan’s analysis pointed out that from the recent frequent policies, the general tightening of the financing environment has also brought some pressure to the financing of housing enterprises. However, large and medium-sized housing enterprises can obtain large-scale financing inflows in the capital market by virtue of their high solvency and credit rating; Small and medium-sized housing enterprises are limited in scale. Without the background of state-owned enterprises, the financing threshold of companies is greatly improved and the financing pressure is greater.
The agency believes that for the real estate industry, the government’s increased supervision of funds in the real estate industry is conducive to maintaining the stable operation of the industry and avoiding overheating in the market; On the other hand, it is conducive to accelerating industry integration, realizing the strong and staying strong, and avoiding the phenomenon that bad money drives out good money.
In the industry’s view, no matter the uncertainty of the external environment increases or the impact of the internal epidemic, the bottom line of the real estate industry’s regulation of "staying and not speculating" has not wavered. From the starting point of the policy, the purpose of strict capital supervision is also to make the development of the real estate industry more controllable and under strong control.
Industry differentiation will further intensify in the fourth quarter.
Based on the market situation since the beginning of this year, the outbreak of COVID-19 epidemic at the beginning of this year once blocked the sales of housing enterprises. However, as of the end of September, the sales of real estate enterprises have returned to the same period last year, and most real estate enterprises have shown a year-on-year upward trend.
According to the recent sales performance data of typical real estate enterprises in Yihan think tank, the sales level of typical real estate enterprises in the first three quarters showed strong resilience. Only six of the TOP30 housing enterprises saw a year-on-year decline in sales in the first three quarters, and the rest all increased compared with the same period last year.
At the same time, with the normalization of epidemic prevention and control, the target completion of key housing enterprises still needs to be improved. By the end of September 2020, the completion rate of sales performance target of typical real estate enterprises was 70%. Among the 30 typical housing enterprises, half of the target completion is still less than 70%. This means that the performance pressure of housing enterprises in the fourth quarter is still not small.
In view of the market trend in the fourth quarter, the Central Reference Institute analyzed and predicted that the pilot of the new regulations of "three red lines" for capital supervision in the industry will be gradually implemented, and some real estate enterprises will take the form of concession promotion to grab back the money. It is expected that the improvement of supply will continue to support the transaction volume to maintain a certain scale, but considering that the central and hot cities will continue to adhere to strict regulation and control, and there is still the possibility of repeated local epidemics in autumn and winter, the transaction scale of commercial housing in key cities in the fourth quarter will remain relatively stable at the existing level.
Shen Xin, a researcher at Yiju Research Institute, pointed out that since the second half of the year, the regulatory policies of hot cities and financial policies have been constantly tightening, indicating that the bottom line of the central government’s "housing and not speculating" will not change.
Shen Xin further analyzed and pointed out that Evergrande took the lead in opening the "30% discount on national real estate" in early September, which started the first shot of property market promotion. Since then, Country Garden, Greenland, Vanke and other housing enterprises have also started different degrees of promotion activities. It is expected that under the pressure of "three red lines", more real estate enterprises will join the promotion ranks in the fourth quarter to promote the return of funds by exchanging price for quantity.
This year, in the context of the slowdown in industry growth, the performance of the top 100 housing companies also showed differences due to the impact of the epidemic. Under the current market environment, the concentration of housing enterprises in various echelons continues the differentiation pattern, and the competitive advantages of large-scale housing enterprises are prominent, while the sales of small and medium-sized housing enterprises are still facing greater growth pressure.
Kerry Real Estate Research Center pointed out that in the fourth quarter, on the one hand, housing enterprises entered the performance sprint season, and the market supply accelerated, which will drive the transaction to increase. At the same time, the fundamentals that the industry as a whole is still under pressure have not improved significantly. The trial of the new regulations of "three red lines" will force housing enterprises to speed up the improvement of operational management and control efficiency. This also means that the fourth quarter will intensify the differentiation pattern of the real estate industry and promote the acceleration of concentration. (Reporter Gao Wei reports from Beijing)
