Vanke's daily limit has risen for the first time in 516 days, and real estate stocks have set off a tide of daily limits, and the real estate sector has come out of the predicament?

Guo Shiliang

2024-04-30 07:55Published in Guangdong financial commentator, financial columnist

  Vanke's stock price has a rare daily limit, and it has been 516 days since the last stock price limit. Before the limit of Vanke this time, the stock price had fallen from 10 yuan at the beginning of March this year to the lowest 6.45 yuan, and Vanke's A shares fell by nearly 40% in more than a month. Vanke's H-shares once fell to less than HK$4, and H-shares, which fell even more sharply before, have now become the vanguard of the rebound.

  Under the influence of Vanke's daily limit, the real estate sector and the real estate industry chain have set off a tide of daily limits, and many real estate stocks that have been adjusted for a long time have also rebounded sharply.

  Behind the sharp rise in the real estate sector, it may be affected by three factors.

  The first factor, the Chengdu property market has completely canceled the purchase restriction, no longer review the household registration, no longer review the social security, no longer limit the number of units purchased, etc., Chengdu's comprehensive cancellation of the purchase restriction policy has an extraordinary impact. Prior to this, cities including Changsha and Nanjing have relaxed purchase restrictions. So far, only Hangzhou, Tianjin, Beijing, Shanghai, Guangzhou and Shenzhen have maintained the purchase restriction policy.

  The prelude to the cancellation of purchase restrictions in large cities has had a positive impact on the short-term boost in property market demand. At the same time, the current mortgage interest rate is relatively low, and for investors who just need and improve, it is now more cost-effective to invest in real estate than in the previous two years.

  The second factor is that the market has always been pessimistic about the real estate industry, but some foreign institutions have begun to change their views. Among them, UBS expressed optimism about China's real estate industry, which also changed the previous bearish attitude of the market.

  When the market forms a bearish expectation, it is difficult for the demand in the real estate market to get a substantial boost. However, when this bearish expectation begins to shift and bullish optimism begins to appear, it may have a more or less bullish impact on the short-term real estate market trend.

  The third factor is that the real estate stocks of A-shares and H-shares are in a state of over-decline, and if they fall too much, they will generate rising demand. In the same way, if it rises too much, there will be a risk of falling. For some real estate companies with better quality, this round of decline is relatively fierce, and there is even the possibility of being wrongly killed by the market. Once the capital situation improves and the policy environment continues to recover, then the market will also have a need for technical repair or valuation repair.

  In the final analysis, the rapid rebound of this round of real estate sector has benefited from the large decline in the early stage, and the valuation of the industry has been at the lowest level in history. When the market investment sentiment is extremely pessimistic, it is often easy to generate opportunities for emotional reversal.

  Everything is cyclical, and the real estate market is no exception. In Merrill Lynch's investment clock, each economic cycle is divided into four phases: recovery, overheating, stagflation and recession. The real estate industry, which has been in a bull market for more than ten years, has completed the period of recovery and overheating, and the market is under pressure to adjust.

  When it comes to the economic cycle of real estate, we have to mention the Kuznets cycle, which is also what we often call the real estate or construction cycle. In general, the Kuznets cycle is 15 to 25 years, which is a long-term property.

  Before 2021, the real estate market has gone through more than 15 years of cyclical market, after 2021, the real estate market is facing adjustment pressure, the market is in the stage of destocking, price rational return, when the new round of recovery cycle starts, still depends on the substantial recovery of market demand.

  Vanke rarely has a daily limit trend, and the short-term rise is more inclined to technical repair or valuation repair market. However, the height of the stock price still depends on the company's performance. If the industry's prosperity has been sluggish and the performance of listed companies is still pessimistic, it will be difficult to promote a substantial reversal of the company's stock price, and the market is more likely to define this rise as an over-falling rebound.

   The main difference between rebound and reversal is that the former is only a repair of extreme price performance, and after the repair, it will run along the original trend, while the latter is a turning point in the price trend, from a downward trend to an upward trend, and it is also a reversal of the company's fundamentals and market sentiment.

  Chengdu has lifted purchase restrictions, and other cities have followed suit, which has had a short-term positive impact on the real estate market. However, there is still some uncertainty about whether the demand of the real estate market can be substantially rebounded, and it is not ruled out that there will be more supporting measures in the future to promote the accelerated recovery of the real estate market.

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Personal opinion, for reference only