On the evening of January 26, the China Real Estate Association issued a call to suspend the sales activities of the sales offices of the national real estate, and to recover after the epidemic. According to Keruis incomplete statistics, up to now, at least 60 provinces and cities, including Hunan, Jiangxi, Guangdong, Hainan, Wuhan, Chengdu, Chongqing and Fuzhou, have issued notices to explicitly suspend the sales activities of the sales offices.
With the continuous outbreak of new crown pneumonia, the time for enterprises to return to work has been postponed all over the country. It is understood that many provinces and cities require enterprises to return to work no earlier than February 9 (January 16), such as Beijing, Guangdong, Zhejiang, Chongqing, Shanghai, Fujian, Yunnan, etc. Beijing housing and Urban Rural Development Commission issued a notice on January 29, requiring the municipal infrastructure project of housing construction in the city to return to work or start construction no earlier than 24:00 on February 9, and must implement closed centralized management on the construction site and living quarters.
Some provinces and cities return to work even later. On February 6, Zhengzhou issued a circular requiring real estate service enterprises such as real estate development enterprises online sales and intermediary sales to resume work on February 24, real estate development enterprises sales department to resume work on March 2, and real estate and other construction projects to resume work on March 16. In principle, Yuhang District of Hangzhou requires all construction enterprises and construction sites to start and resume work no earlier than 24:00 on February 29.
At the enterprise level, many enterprises, including Evergrande, have informed to postpone the resumption of work or the commencement time. On February 2, Evergrande issued a document saying that in order to cooperate with the prevention and control of the epidemic, it delayed the resumption of work until February 17, and closed 1246 projects and 1040 sales offices nationwide before February 20.
Volume or cut back in February
As a social emergency, SARS in 2003 caused a temporary decline in domestic GDP and real estate industry, but after the epidemic ended, it stopped falling and rebounded. But as time goes by, the impact on real estate will be different in different economic scale, different industry development stage and different epidemic situation.
Especially in the current Chinese real estate market, before the outbreak of new crown pneumonia, it has been faced with three years of real estate regulation and control, continuous tightening of the financing environment, the debt repayment peak, etc., which is in a relatively difficult period.
How will the new crown pneumonia affect Chinas real estate market transactions, the demand of buyers and the cash flow of enterprises? The impact of the outbreak will be obvious in the short term, according to the analysis of institutions, research institutes and industry insiders.
Northeast Securities Research Institute said that considering the impact of the new crown pneumonia epidemic is still continuing, it is expected that sales, resumption of work and new promotion in February will be affected, and the downward trend of industry sales in February will continue. Delayed resumption of work will also affect the new construction of real estate enterprises, and may have a negative impact on the new opening of xiaoyangchun in March and April. If it lasts for a long time, real estate sales may face a sharp decline in the first quarter, and the capital chain of highly leveraged real estate enterprises will also be under pressure.
On the whole, the impact on trading volume in January was smaller, with the main impact on trading appearing in February, and trading volume may fall by 50%, a real estate executive told reporters. According to academician Zhong Nanshan, it is expected to usher in the turning point in February, but March is still a strict control period, and trading volume will not be good.
In fact, from the perspective of institutional data, real estate sales in January have been affected. According to the statistics of Kerui, in January, the total sales volume of top 100 real estate enterprises decreased by 12.7% year-on-year, the equity sales volume decreased by 16.2% year-on-year, the total sales volume of top 30 real estate enterprises decreased by 10.3% year-on-year, and the equity sales volume decreased by 12.2% year-on-year.
How long will the new crown pneumonia affect real estate? According to the executive, the final impact will come to an end in May. After that, the trading volume may rebound. In the first half of the year, the trading area of the national real estate market is expected to decline by more than 20%.
It is worth noting that offline sales are stagnant, and many real estate enterprises have opened up online sales paths. However, in the view of most industry insiders, online consultation can be satisfied, but it is difficult to replace the link of offline viewing and signing. However, Zhang Bo, President of 58 anjuke Real Estate Research Institute, pointed out that although the online marketing mode during the outbreak of new crown pneumonia will not have an immediate effect on the sales promotion of real estate enterprises, with the end of the epidemic, the rapid increase in the demand of users for housing, the effect may be concentrated.
It should be noted that the shutdown may not mean the disappearance of demand. Some insiders pointed out that although the outbreak of new crown pneumonia temporarily inhibited the release of housing demand, it does not mean that it disappeared. Ding Zuyu, CEO of Yiju group, said that the demand was only delayed, and it would not disappear because of the epidemic. Once the new crown pneumonia epidemic has stabilized, or even basically improved, I think the market will recover rapidly, and there will be a certain degree of retaliatory rebound in volume.
Pan Gongsheng, vice president of the peoples Bank of China and director of the foreign exchange bureau, also said at the press conference of the State Council on the joint prevention and control mechanism of the new crown pneumonia epidemic held on February 7 that the impact of the new crown pneumonia epidemic on the economy is periodic and temporary, because it coincides with the Spring Festival, has an impact on tourism, catering, entertainment and other industries, and the extension of holidays will also have an impact on industrial production and construction industry , it is expected to cause disturbance to the economy in the first quarter, but the economy will recover soon afterwards.
Repayment pressure of real estate enterprises increases sharply
The real estate transaction enters the ice age, for the real estate enterprises, the biggest impact is cash flow and debt repayment.
In 2020, under the new crown pneumonia epidemic, the sales revenue of real estate enterprises stagnated, which had a great impact. Huang Lichong, President of Huisheng international finance, said that in February and March, the operating cash flow of real estate enterprises will be reduced by about 60%. At the same time, at the financing level, there is no way to conduct roadshows, financial assets are not operating smoothly, and the possibility of relying on continued issuance of bonds to supplement cash flow is greatly reduced.
But the huge amount of debt on the real estate companies is still there. According to statistics of Huatai Securities, in 2020, 2021 and 2022, the maturity of domestic real estate bonds was 431.6 billion yuan, 621.2 billion yuan and 376.4 billion yuan respectively, totaling 1429.2 billion yuan.
According to the analysis of China Index Research Institute, for the real estate industry with high cash flow dependence and high debt level, short-term ischemia will cause some enterprises to face shock risk.
In this regard, the insiders suggest that the primary task of real estate enterprises at present is to ensure the stability of cash flow. One is to reduce investment and land acquisition. The other is to communicate with creditors for an appropriate extension if there are debts due but they cannot be repaid.
According to Zhang Bo, for major real estate enterprises, there are three most important points at present. One is that they should not be too radical. They should ensure the safety of funds through refined management and operation. Construction personnel, material procurement, construction organization, etc. should be prepared in advance. After all, it is far more important to live at present than scale. The other is to improve their ability and strengthen the empowerment of grass-roots units and ensure the safety of each unit The third is to prepare for the possibility of a rapid rebound in the popularity of house purchase after the epidemic, including sales strategy and publicity strategy, and pay full attention to online customer acquisition channels.
Financing environment to be improved
For real estate enterprises, cash flow is the lifeline of life and death. Therefore, the industry calls for financial support to real estate enterprises. Some research institutions said that the epidemic will affect all industries to a certain extent. At present, more than one level of response has been opened. The short-term operating pressure of real estate enterprises is inevitable. It is hoped that financial institutions can adjust some financing policies in response to the current difficulties of real estate enterprises, so as to promote the joint development of both sides and overcome the difficulties together.
Zhang Bo also believes that under the influence of the new crown pneumonia epidemic, the normal start-up and sales of real estate development enterprises are greatly affected. In terms of financing, it is necessary to give some support to real estate enterprises.
In fact, the new crown pneumonia epidemic has brought great difficulties and challenges to Chinas economic development, but at the same time, in terms of fiscal and tax policies, the state is giving strong support to major industries, which will undoubtedly benefit the real estate industry.
On February 1, the central bank and other five ministries and commissions jointly issued a notice to encourage the reduction of loan interest rates, mainly including the extension or renewal of loans for enterprises seriously affected by the epidemic that are difficult to repay when due. We will support relevant enterprises to overcome the impact of the new crown pneumonia epidemic by appropriately reducing loan interest rates, increasing credit loans and medium - and long-term loans. It is understood that after the issuance of the notice of CBRC, a number of banks, including China Development Bank, China CITIC Bank and Bohai bank, have launched special financial services measures to reduce the loan interest rate of enterprises in the epidemic area. In addition, according to Yu Weiping, Vice Minister of the Ministry of finance, the Ministry of finance, together with relevant departments, has successively introduced relevant tax reduction and fee reduction policies, which will be further implemented. Therefore, under the background of relatively positive financial and fiscal policies, the real estate market will also benefit to a certain extent. Duan Wenping, reporter of Beijing news source: Yang Zeyu, editor in charge of Beijing News
On February 1, the central bank and other five ministries and commissions jointly issued a notice to encourage the reduction of loan interest rates, mainly including the extension or renewal of loans for enterprises seriously affected by the epidemic that are difficult to repay when due. We will support relevant enterprises to overcome the impact of the new crown pneumonia epidemic by appropriately reducing loan interest rates, increasing credit loans and medium - and long-term loans.
It is understood that after the issuance of the notice of CBRC, a number of banks, including China Development Bank, China CITIC Bank and Bohai bank, have launched special financial services measures to reduce the loan interest rate of enterprises in the epidemic area.
In addition, according to Yu Weiping, Vice Minister of the Ministry of finance, the Ministry of finance, together with relevant departments, has successively introduced relevant tax reduction and fee reduction policies, which will be further implemented.
Therefore, under the background of relatively positive financial and fiscal policies, the real estate market will also benefit to a certain extent.