The cumulative growth rate of real estate investment in October was 0.2 percentage points lower than that of last month, still as high as 10.3%. Among them, due to the developers taking the construction and sales strategies, the growth of construction area and sales area has been accelerated.
Developers are working hard to sell, but the financial pressure has not really eased. Yan Yuejin, director of think tank center of Shanghai E-House Real Estate Research Institute, commented.
Selling houses and collecting money became hot words
The overall performance of the property market in the first half of this year was lower than that of the same period last year due to the high base last year and the failure of little Yangchun.
Since the second half of the year, there has been a rebound. From July to October, the sales area of commercial housing in China was higher than that of the same period last year for four consecutive months, which made the sales scale in the first 10 months turn from negative to positive.
According to the Statistics Bureau, in the first 10 months of this year, the sales area of commercial housing in China was 1332.51 million square meters, up 0.1% year-on-year, and it has been growing for the first time since this year; the sales volume of commercial housing was 12441.7 billion yuan, up 7.3%, up 0.2 percentage points, and expanding for four consecutive months.
It is worth mentioning that many real estate enterprises increase their sales promotion in September and October, and the situation of price for quantity is quite common. At the end of August, Evergrande launched a price marketing strategy covering most of the real estate projects in the country, with regional companies under the group participating in the marketing. In terms of actual effect, Evergrande obtained the sales record of 83.1 billion yuan in September with price concessions. In October, Evergrande sold another industry record of 90 billion yuan.
As domestic financing is greatly limited, overseas financing is difficult to fill the gap, selling houses has become the main channel for housing enterprises to collect funds. The most frequently mentioned words of the company this year are sales and payment collection . A person in charge of a listed real estate enterprise in Beijing told the 21st century economic report that focusing on sales and promoting payment collection has become the main theme of the whole industry. In addition to assessing the sales scale, some real estate enterprises also list the payment collection rate as a hard assessment index.
The effect of collection is obvious. According to the Statistics Bureau, in the first 10 months of this year, the growth rate of deposit, advance payment and personal mortgage loan reached 9.4% and 14.1% respectively. In the first half of this year, the growth rates of these two indicators were 9.0 and 11.1%, respectively.
These two accounts for almost half of the financing sources of real estate enterprises.
But on the whole, the rising sales have not really improved the capital situation. In the first 10 months of this year, real estate enterprises paid in 1.45 billion yuan, an increase of 7.0% year-on-year, and the growth rate fell again after a brief increase in September.
The pressure will continue for some time. According to the report of Evergrande Research Institute, from 2019 to 2021, real estate enterprises gradually ushered in the peak of debt repayment. In terms of the scale of repayment, the scale of matured debts in these three years is 6.1 trillion yuan, 5.9 trillion yuan and 3.4 trillion yuan respectively.
According to the aforementioned real estate enterprise personage, from the perspective of financial model, except for a few large and medium-sized real estate enterprises, the cash flow of many enterprises has a great risk of decline, and the cash flow of some real estate enterprises has been difficult to cover short-term liabilities.
Housing sales growth picked up
Due to the lack of sufficient funds, the pace of investment in real estate enterprises has been restricted. According to the Statistics Bureau, in the first 10 months of this year, Chinas real estate development investment reached 10960.3 billion yuan, up 10.3% year on year, 0.2 percentage points lower than that from January to September. Since May, the growth rate of this indicator has been keeping the overall decline, which is now the lowest in the year.
In the same period, the land acquisition area of real estate development enterprises was 183830000 square meters, down 16.3% year on year; the land transaction price was 992.1 billion yuan, down 15.2%. Since this year, the scale of land acquisition by real estate enterprises has been in a negative growth state.
Prudent investment is the main guiding ideology of the industry at this stage. On November 11, Xincheng holding held the second extraordinary general meeting of shareholders this year. The management revealed the recent land acquisition strategy: steady response, step on the right pace to take the land.
By October of this year, the sales scale of Xincheng holding had exceeded 200 billion, but the land acquisition of the company in the second half of this year was significantly reduced. According to the disclosed data, from July to October, Xincheng holdings acquired 12, 0, 1 and 0 land respectively.
Shanghai E-House Research Institute pointed out that in October this year, most of the 31 typical real estate enterprises received less land than the average level from January to September. Among them, Evergrande, country garden, rongchuang, Vanke and other First Corps have less than 0.1 land sales ratio in a single month. Another seven real estate enterprises did not achieve anything, including Xincheng holding, Yajule, sunshine city and other 100 billion real estate enterprises.
According to the agency, these enterprises have abundant soil reserves, and the main reason for slowing down is to match the current pace and reduce the risk of monetary tightening.
Yan Yuejin pointed out that if the financing environment is not fundamentally improved in the future, the existing strategies of real estate enterprises will continue to be implemented, that is, shrink investment and accelerate sales.
According to the Convention, real estate enterprises tend to increase sales at the end of the year, thus impacting the annual sales target. And in the past 10 years, the sales volume in December has been the highest of the year. According to Yan Yuejin, by the first 10 months, the sales target of this years real estate enterprises is relatively good, but because of the downward trend of the real estate market, the enterprises will continue to strengthen sales, so as to carry forward the income to next year or even the next year.
Zhang Dawei, chief analyst of Zhongyuan Real estate, agrees. He said that under this impetus, the sales area of commercial housing this year is expected to exceed last years historical peak, and the sales amount is likely to break through the 15 trillion mark and reach a new high.
From 2016 to 2018, the scale of commercial housing sales reached a new high for three consecutive years. In 2018, the sales area of commercial housing is 1716.54 million square meters, and the sales volume of commercial housing is 1499.73 billion yuan.
Source: responsible editor of 21st century economic report: Chen Hequn, nb12679