The real estate sector ushered in a "small spring"?
In recent days, the real estate sector of Hong Kong stocks and A-shares has been repeatedly sought after by funds, and the rise is eye-catching. On May 10, the AH real estate sector strengthened again, in terms of A-shares, Tiandiyuan, CCCC Real Estate, and China Merchants Shekou exceeded 5 individual stocks, and in terms of Hong Kong stocks, the domestic real estate stock sector rose more than 6% to lead the sector, Shimao Group (00813) soared 60% eye-catching, and Xinchengfa (01030), Zhongliang Holdings (02722), and Logan Group (03380) all rose more than 15%.
(Market Trend: Futu)
In fact, such a rally was staged on April 29 - at that time, the A-share real estate sector staged a rising limit, with nearly 20 shares rising by more than 10%, and the leading Vanke A had a strong daily limit. The Hong Kong stock market also rose by 60%, with Shimao Group rising by 60% on the same day, and Kaisa Group and Sunac China also rising by more than 20%.
Not only that, in the long term, since April 19, in just 15 trading days, the real estate stock sector in the Hong Kong stock market has risen by more than 36%, and the rally is eye-catching.
On closer inspection, this seems to be related to the recent series of relaxation policies on purchase restrictions.
The "policy bottom" is coming, will the "market bottom" be far away?
For the stock market, a series of liberalization of purchase restrictions is obviously no less than a number of high-efficiency "boosters".
On April 28, Chengdu issued a new policy to cancel the qualification review of housing purchases for housing transactions in the city, becoming another city that has fully liberalized housing purchase restrictions after Wuhan, Hefei, Nanjing and Changsha. Subsequently, on April 30, Beijing and Tianjin announced the optimization of housing purchase restrictions. Subsequently, on May 6 and 10, Shenzhen and Hangzhou successively issued notices to further optimize real estate policies.
(Image source: China Securities Construction Investment)
It can be said that in just a few months, with the introduction of the relaxation policy of purchase restrictions, the property market in Beijing, Shenzhen, Guangzhou, Shanghai, Hangzhou, Chengdu, Chongqing, Changsha and Nanjing is almost "completely open".
For this series of purchase restriction relaxation policies, most brokerage institutions directly said: "It may be conducive to stimulating market potential and accelerating the pace of recovery of the real estate market."
Among them, Founder Securities pointed out that under the guidance of the National Standing Committee and the Politburo meeting, many cities have recently responded to the call of the meeting and comprehensively relaxed the purchase restrictions, and Beijing and Shenzhen have successively optimized the purchase restrictions. At present, it is in a period of intensive policy relaxation, and the purchase restrictions in first-tier cities are expected to continue to be relaxed, and the industry has stabilized with a relaxed policy environment.
Yan Yuejin, research director of the E-House Research Institute, also believes that the cancellation of the purchase restriction policy in Xi'an and Hangzhou on the same day means that the cancellation of the purchase restriction policy is a general trend, and almost all provincial capitals across the country have canceled the purchase restriction policy. He believes that the wave of more policy easing in May has arrived, and the follow-up market sentiment will be further boosted, which will also help to promote the recovery of the real estate market to further accelerate.
In fact, Zhitong Financial APP noticed that the "opposite" of the property market ushering in the wave of policy easing - is that the real estate sales data is still bleak, and the industry is still in a "downturn" at the bottom of the cycle.
According to data from the Bureau of Statistics, in the first quarter of 2024, the sales area of commercial housing nationwide was 227 million square meters, a year-on-year decrease of 19.4% (1-2
-20.5%), of which the sales area of commercial residential buildings decreased by 23.4% year-on-year; From January to March, the sales of commercial housing were 2.14 trillion yuan, down 27.6% year-on-year (January-February, -29.3%), of which the sales of commercial housing fell by 30.7% year-on-year.
In addition, judging from the market share of the top 100 real estate companies in CRIC, the market is still bottoming out, and the year-on-year decline in the sales of the top 100 real estate companies continues to expand, and the scale of sales performance in the first quarter will decrease by 49%, 48%, and 72% respectively compared with 2021-2023, with a significant contraction.
(Image source: Kaiyuan Securities)
From the above data performance, it is not difficult to see that although the real estate industry has ushered in the "policy bottom", the market is still at the bottom, so it is not difficult to understand the purpose of the introduction of a series of easing policies, that is, to further activate the real estate market and promote the healthy development of the market.
Valuation repair is imminent, and high-quality real estate companies may welcome the opportunity to rebound
So, what is curious is the follow-up development of real estate under the support of the "policy bottom"?
Among them, Huatai Securities believes that, on the whole, the new housing market is still bottoming out this year, and the statement of the Politburo meeting is targeted, and the attitude of stimulating demand to stabilize the market is resolute, and Beijing, Chengdu, Shenzhen, Hangzhou and Xi'an have optimized the current policies at the landing level, and it is expected that the scope of the follow-up adjustment policy will be further expanded, which is expected to promote market confidence and fundamental repair, and provide valuation repair space for the sector.
Guojin Securities also pointed out that after the Politburo meeting set the tone, a new round of policy outlets has arrived, the policies of core first- and second-tier cities continue to be optimized, and more supportive policies can be expected to be introduced in the future. At present, the fundamentals of the industry are already in the bottom range, the subsequent downside is limited, and the valuation of the real estate sector is at a historically low level. The stock price of real estate stocks usually reacts faster than the recovery of fundamentals, so the bottom of real estate stocks is basically clear. It is the first to launch real estate companies that focus on first-tier and core second-tier cities, focus on improving products, and have the ability to continue to acquire land.
In fact, as far as the above-mentioned brokerage institutions are concerned, high-quality real estate enterprises with abundant value and strong development capabilities, as well as central state-owned enterprises, are indeed worthy of market attention, because in this round of downward cycle, the growth resilience of central state-owned enterprises and some high-quality real estate enterprises is obviously stronger.
Take data, for example.
According to Guojin Securities, the full-caliber sales of the top 100 real estate companies in 2023 will be 6,006.4 billion yuan, a year-on-year increase of -17.7%. In this context, the overall sales performance of all echelons of real estate companies declined. From the perspective of the full-caliber sales of each echelon of real estate enterprises in 2023, the TOP10, TOP11-30, TOP31-50, and TOP51-100 have cumulative year-on-year growth rates of -13%, -18%, -23%, and -24%, respectively, and the top real estate companies are relatively more resilient, and among the top 20 real estate companies, only C&D Real Estate and Yuexiu Real Estate have achieved sales growth of more than 10%.
From the perspective of various land-grabbing entities in the land market, central state-owned enterprises have the largest amount of investment, and the proportion continues to increase. According to the data of the China Index Institute, in 2023, the amount of land acquired by central state-owned enterprises (excluding urban investment) will total 968.3 billion yuan, accounting for 43.2%, an increase of 6.8 pct year-on-year; the total amount of land acquired by urban investment equity was 904.4 billion yuan, accounting for 40.4%, down 8.3pct year-on-year; the total amount of land acquired by private enterprises totaled 253.1 billion yuan, accounting for 11.3%, a year-on-year decrease of 0.5 pct; The amount of equity land acquired by mixed-ownership real estate enterprises totaled 114.9 billion yuan, accounting for 5.1%, an increase of 2.1 pct year-on-year. The proportion of land acquired by central state-owned enterprises continued to increase, becoming the absolute main force in the land market, while private enterprises gradually cleared out of the land market.
In addition, from the perspective of specific real estate enterprises, in 2023, Poly Development, China Overseas Real Estate, China Resources Land, C&D Real Estate, and China Merchants Shekou will rank among the top five in the industry in terms of equity land acquisition, all of which are central state-owned enterprises. Among the top 10 real estate enterprises in terms of equity land acquisition, there are 8 central state-owned enterprises and 2 mixed-ownership real estate enterprises; Among the top 30 real estate enterprises in terms of equity land acquisition, there are 19 central state-owned enterprises, 5 urban investment enterprises, 4 private enterprises and 2 mixed-ownership real estate enterprises. Among the private real estate enterprises, Binjiang Group, Longfor Group, Weixing Real Estate and other land acquisition performance is better.
As the saying goes, "the wind knows the grass", and the above-mentioned high-quality real estate companies that can resist the downward pressure of the industry and are more resilient obviously have sufficient momentum to take the lead in ushering in the rebound opportunity when the valuation is repaired.
However, it should be noted that the lifting of purchase restrictions does not mean that the property market will usher in a skyrocketing market.
Although theoretically speaking, the full liberalization of the "purchase limit" will definitely be good for the property market, which is equivalent to releasing a part of the demand, which may change the current imbalance between supply and demand in the market after entering the market. However, the purchase restriction itself is a policy tool during the economic boom period, and the lifting of the purchase restriction will not stimulate a large amount of demand during the downturn, because most of the entities with purchasing power will still hold on to the currency. In addition, the lifting of purchase restrictions in any city will stimulate the lifting of purchase restrictions in the same niche. In short, after the purchase restrictions are lifted in the core cities, it will constitute a siphon to the surrounding areas of the core cities, and the surrounding cities may face a decline in demand.
Therefore, this undoubtedly also plays a certain role in reminding investors in the secondary market, that is, prudent stock selection and selection of individual stocks with good fundamentals for investment.