Yu Liang, chairman of Vankes board of directors, remained pessimistic about the market prospects when facing the media on the 14th. He said it was impossible for the real estate industry to regain its past growth rate.
Yu Liangs judgment comes from many signals in the market. According to data released by the National Bureau of Statistics on the 14th, the sales area of commercial housing was 1486.04 million square meters from January to November, up 1.4% year-on-year, and the growth rate dropped 0.8 percentage points from January to October. Sales of commercial housing reached 1295.08 billion yuan, an increase of 12.1%, and the growth rate fell by 0.4 percentage points.
According to Zhang Dawei, chief analyst of Central Plains Real Estate, in September, October and November of this year, the monthly sales area of the national real estate market has declined year-on-year for three consecutive months. In 2018, it is likely that the sales amount of commercial housing will break a new historical record and the transaction area will be flat. If the policy remains unchanged in 2019, the real estate market will undergo a significant adjustment, and the market inflection point has emerged. Zhang Dawei said.
Ouyang Jie, senior vice president of Xincheng Holdings, believes that in the future, the property market will be stable mainly, and the market will hit the bottom of the warming in 2019. The specific manifestations are as follows: the land flow pats will be significantly reduced, the price reduction promotion of Housing enterprises will be reduced, the price reduction of second-hand housing will be significantly reduced, and the whole market is in a relatively stable but not hot bottom state.
Whether it is sales area, sales amount, or real estate investment, the trend from growth to decline seems inevitable. Spring River Water Warm Duck Prophet, Housing enterprises have always been prudent, and their strategic changes also herald the arrival of the inflection point of the real estate market. The industry is more concerned about: tightening the regulatory policy, in the context of unsalable new housing and poor financing channels for housing enterprises, will it be flexible adjustment in the future?
Market inflection point looms
Towards the end of recent years, the pattern of the real estate market has been determined. From the macro data, the real estate market remained stable in 2018. Although sales area and sales volume increased year-on-year, compared with the total annual sales area of 1.6 billion square meters and sales volume of 13 trillion yuan in 2017, this years data will not be too far apart and remain stable as a whole.
On December 15, the National Bureau of Statistics released statistics on the changes in the sales prices of commercial housing in 70 large and medium-sized cities in November 2018, which showed that the real estate market remained stable as a whole in November. According to preliminary estimates, sales prices of newly built commercial housing in four first-tier cities rose by 0.3% annually. Among them: Beijing and Shanghai rose 0.6% and 0.5%, Guangzhou was flat, Shenzhen fell 0.2%.
At the enterprise level, most companies still maintain a steady increase in sales volume and area. According to the list of real estate sales from January to November 2018 by Kerui, the sales of Biguiyuan, Vanke, Hengda and Rongchuang ranked the top four in the industry with 66.45 billion yuan, 54.23 billion yuan, 53.91 billion yuan and 41.63 billion yuan respectively.
However, in addition to macro data, there are still many signs of chills in the market.
Since October, the stock housing market has been hit by Waterloo. Data show that the volume of second-hand housing transactions in four first-tier cities in Beisheng, Guangzhou and Shenzhen has gradually declined since the middle of this year, and recorded a low level in October. By November, the sales prices of second-hand housing in four first-tier cities dropped by 0.4%, a decrease of 0.2 percentage points over last month; while the sales prices of second-hand housing in 31 second-tier cities and 35 third-tier cities have only increased by 0.3% and 0.4%.
Zhang Dawei believes that from the perspective of second-hand housing prices, the inflection point of national housing prices has emerged. The second-hand house prices in more than 10 hot cities have been lowered for two consecutive months, which is the first time in the last four years. It is expected that in the next few months, the decline of second-hand house prices will continue to increase, and the price of new residential buildings in some cities will gradually begin to adjust.
On the other hand, by the end of recent years, the market atmosphere is more intense than in the first half of the year, and buyerswillingness to buy houses has dropped to freezing point. This also greatly affects the sales rhythm of developersfirst-hand real estate, leading to a peak season situation at the end of the year. Developers can only attract buyers into the market by taking a large reduction in prices and promotions.
The weakness of the first-hand housing market is already evident in the gold, nine silver and ten silver. According to Kerui data, in October this year, the monthly performance of top 100 housing enterprises was 10.5% lower than that in September, and sales slowdown was more obvious. The same-rate growth of the top 100 housing companiesmonthly performance has also slowed down since the third quarter, from a high of 58.1% in July to 26.1% in October.
Correspondingly, most of the housing enterprises push the peak period of goods in the three and fourth quarter, the market does not give strength to the reality, to the housing enterprises a heavy blow, resulting in many companies in the first 11 months of the total sales and the sales target set at the beginning of the year there is still a big gap.
Up to now, although the sales of most housing enterprises in the first 11 months still recorded a certain growth compared with the same period last year, the growth rate of many companies has slowed down significantly, and some housing enterprises have been difficult to achieve their annual goals, so December is still a critical moment of momentum.
Taking Vanke, Biguiyuan and Hengda as examples, the average growth rate of the above three companies was 53% in 2017, but this years growth rate dropped seriously, while the sales volume of Vanke in the first three quarters increased less than 10% year on year.
Dual Pressure of Sales and Financing of Housing Enterprises
Our companys annual target is very difficult to achieve, after a sprint, there will be a shortfall of about 10 billion yuan. The director of marketing department of a listed real estate company in South China can hardly hide his anxiety. As one of the responsible persons of marketing population, its department is facing great pressure. If it fails to complete its task, the year-end prize of the whole department will be lost.
There is not much time left for housing companies. In the market, there are more and more cases of Housing enterprises actively launching new discs or low-price promotions.
On the evening of Nov. 26, Fanshanfu, a luxury house project under Vanke, opened with online house selection mode at a lower price than expected; on Nov. 28, Vanke Star City opened with a degrading rate of nearly 57% that night; earlier, Jinmao, China, had a special sale in Ludao, Xiamen, where the sale price was lower than the floor price of the land, showing the drama of losing money in selling houses.
The overall atmosphere of the industry is still pessimistic, so most companies will speed up the process of de-liquidation to withdraw funds and adopt a cash-based strategy, said the head of marketing department of TOP10, a Guangzhou-based real estate company. The promotion sprint at the end of the year began as early as November, and there should be some special cases in the last few days.
For next years market, most industry people are not optimistic. Some analysts predict that the overall market turnover will decline by about 10%.
In addition to the slowdown in sales data, the growth of real estate investment has gradually slowed down, and the pressure of corporate financing has gradually emerged.
According to the data of the National Bureau of Statistics, from January to November 2018, the capital in place for real estate development enterprises nationwide was 150.7 billion yuan, an increase of 7.6% over the same period last year, and the growth rate fell by 0.1 percentage points compared with January to October. Among them, domestic loans totaled 2180.7 billion yuan, down by 37%; foreign loans totaled 10.2 billion yuan, down by 30.4%; self-financing totaled 5061.9 billion yuan, up by 10.0%; deposits and advances totaled 4955.1 billion yuan, up by 15.7%; personal mortgage loans totaled 2142 billion yuan, down by 0.9%.
This set of data shows that sales repayment is still the main source of funds in place, loan financing continues to grow negatively year-on-year, and financing pressure is still not small.
Liang Hong, chief economist of CICC, predicts that the cash flow of developers is tightening and that the pressure may be increasing. According to estimates, the total amount of real estate bond repayments (including planned resale and maturity) in 2019 may reach 700 billion to 800 billion yuan, which is estimated to be more than twice the actual repayment scale in 2018.
James Woo, senior director of Taiping Davis North China and head of evaluation department, told First Financial Journalist that in 2018, under the background of more stringent financing supervision, financing channels for housing enterprises were gradually tightened. Overall, apart from asset securitization financing, the traditional financing channels of Housing enterprises have been affected to some extent, and the overall financial pressure began to gradually emerge.
But the financing pressure of different types of real estate enterprises is also different. Large-scale state-owned housing enterprises have greater financing advantages, and the financing cost of small and medium-sized Housing enterprises has generally increased, among which the cost of trust financing has increased by 2-3 percentage points compared with last year. Under the strict supervision environment, the overall financing channel is tightened, especially the strict supervision of non-standard business has a greater impact on small and medium-sized housing enterprises.
Hu Jianming told First Financial Journalist that in the context of de-leveraging and strict supervision, the financing channels of the bond market have been significantly narrowed, which made the enterprises accustomed to over-leveraging in previous years and who borrowed too much money from banks and bond markets face greater debt pressure.
At present, the real estate market has entered a period of deep adjustment, and the financing cost and land cost remain high. In order to expand the scale of marketing and land development system in the past few years, enterprises are facing greater pressure. Under current circumstances, the top 100 real estate enterprises choose more flexible financing methods; small and medium-sized developers also make every effort to maintain competitiveness in the cold winter. Hu Jianming said.
Policy Trend Attention
On July 31, the Political Bureau of the Central Committee of the Communist Party of China held a meeting and proposed that we should resolve to solve the real estate market problems, adhere to the policy of city-by-city, promote the balance of supply and demand, guide expectations reasonably, rectify market order and resolutely curb the rise of house prices.
Around this time, Shenzhen and other places continue to introduce lightweight administrative means such as three-price integration and restriction on sales to regulate and control the anticipated management of intensity, and to be vigilant against the resurgence of investment speculation.
Under the policy of regulation and control, new housing is unsalable, and the financing channels of Housing enterprises are not smooth. This year, the number of land patches in China has increased dramatically, even surpassing the coldest land market in recent years in 2014.
In mid-October, there was news in Guangzhou that Zengcheng, Huadu and Nansha had abolished the Price-limit policy. Then the official responded that the Price-limit policy had not been abolished, and that it was strictly forbidden to report the split price of development enterprises. This was quickly interpreted by the market as price-fixing relaxation.
At the same time, other cities have issued new policies for talents, subsidizing the purchase of houses for talents, and striving for relaxation space. Even banks have tried to cut mortgage rates, such as China Merchants Bank Shenzhen Branch recently lowered the first mortgage rate from 15% above the benchmark to 12%.
Recently, the National Development and Reform Commission issued the Notice on Supporting Direct Financing of High-quality Enterprises (hereinafter referred to as the Notice), its impact on the financing of the real estate industry has also aroused great concern in the market. Since this year, the speed of debts examination and approval of real estate companies on exchanges has also accelerated. The amount of debts of real estate companies approved by exchanges in November has increased significantly over the same period of last year. Can the issuance of the Notice serve as a signal for further relaxation of real estate financing?
Hu Jianming said that although the National Development and Reform Commission supports the development of corporate bonds by high-quality enterprises, specific analysis found that, according to the spirit of the central government, only support projects in shantytowns transformation, affordable housing, rental housing and other fields, but not commercial real estate projects, so we can not think that the financing of Housing enterprises began to loosen.
Yuan Hao, an analyst at Huachuang Securities, said that the current regulatory policy has achieved results, and that it is not necessary to tighten the policy. At the same time, there are fluctuation pressures in the economy, and stability or even more crucial under the current situation. He expects that the policy environment of the following real estate market will improve.
At the two meetings of the Political Bureau of the Central Committee on October 31 and December 13 this year, no real estate was mentioned in the study and deployment of the economy. Zhang Dawei believes that the two consecutive Politburo meetings did not mention real estate content, for the real estate market, means that the direction of regulatory policy will not change. From November to December as a whole, the real estate policy is basically stable.
Shen Jianguang, chief economist of Jingdong Finance, predicts that the government will still stick to the non-speculative attitude of housing, while emphasizing the establishment of a long-term mechanism for real estate. Considering the current decline in real estate sales, the growth rate of domestic real estate enterprise loans and mortgage loans is still declining, it is expected that next year the real estate market will remain in the adjustment channel as a whole.
Zhang Jun, chief economist and head of Research Department of Morgan Stanley Huaxin Securities, told First Finance and Economics that considering the steady growth effect of the future infrastructure supplement board, it is expected that the position and policy of real estate regulation will not change significantly at least in the year and before the first half of next year, and the growth rate of real estate investment will continue to decline.
Will the real estate policy be readjusted after the middle of next year? Zhang Jun believes that it mainly depends on the speed at which the effect of infrastructure investment declines and the process of Sino-US trade negotiations.
Zhang Jun predicts that the bottom line of the policy of housing is for living, not for speculation will remain unchanged, but it may adjust the restrictions on purchase and sale in some cities, and relax the down payment ratio, loan conditions and interest rates of first suites.
Liang Hong also said that real estate investment growth in 2019 may fall to - 10% - 5%. In view of the far-reaching impact of the real estate cycle on various areas of macro-economy, the current policies related to real estate demand and developersfinancing need to be adjusted urgently, and the policy adjustment should be sooner rather than later.
Source of this article: First Financial Network Responsible Editor: Li Wan_B11284