The low base effect will drive a year-over-year improvement in sales. The real estate sector will experience a resonance between data and policies at the end of the year, and a positive layout is recommended.
The Zhitong Finance app learned that Guoxin Securities published a research report saying that the Bureau of Statistics released real estate investment and sales data from January to October 2023. The bank believes: 1) The cumulative decline in commercial housing sales has increased, and the wait-and-see sentiment among potential buyers is still heavy. 2) The decline in development investment and available capital continues to expand, and the financial pressure on housing enterprises is high. 3) The performance of new construction is still weak, and the growth rate of completion has narrowed slightly. The fundamental performance of real estate in October was still weak, but I believe that under the “continuous” direction of the property market, the policy will still gain strength. Furthermore, the low base effect will drive a year-on-year improvement in sales. The real estate sector will experience a resonance between data and policies at the end of the year, and a positive layout is recommended.
Recommended: Yuexiu Real Estate (00123), China Resources Land (01109), China Overseas Development (00688).
Matter: The Bureau of Statistics released real estate investment and sales data from January to October 2023. From January to October 2023, commercial housing sales were 971.61 billion yuan, down 4.9% year on year; commercial housing sales area was 99.79 million square meters, down 7.8% year on year; real estate development investment was 959.2.2 billion yuan, down 9.3% year on year; new housing construction area was 791.77 million square meters, down 23.2% year on year; housing completion area was 551.51 million square meters, up 19.0% year on year.
The comments of Guoxin Securities are as follows:
The cumulative decline in commercial housing sales has increased, and the wait-and-see sentiment among potential buyers is still heavy
From January to October 2023, commercial housing sales were 9716.1 billion yuan, -4.9% year-on-year, an increase of 0.3 percentage points from January-September; the sales area of commercial housing was 99.79 million square meters, -7.8% year-on-year, and the decline was 0.3 percentage points higher than January-September. In October 2023, in a single month, commercial housing sales were 809.1 billion yuan, -26% month-on-month, -8.1% year-on-year, and the decline was 6 percentage points narrower than in September; the sales area was 77.73 million square meters, -28% month-on-month and -11.0%, up 0.8 percentage points from September; the average sales price was 10,408 yuan/㎡, +3.6% month-on-year, +3.2%. Up to now, the effects of the real estate policies introduced have not been very sustainable, and the wait-and-see sentiment among potential buyers is still high.
The decline in development investment and available capital continues to expand, and the financial pressure on housing enterprises is high
From January to October 2023, real estate development invested 959.2.2 billion yuan, -9.3% year-on-year, an increase of 0.2 percentage points from January-September; housing enterprises received capital of 1073.45 billion yuan, -13.8% year-on-year, an increase of 0.3 percentage points over January-September. In October 2023, real estate development invested 865.3 billion yuan in a single month, -17% month-on-month and -11.3% year-on-year, the decline was the same as in September; housing enterprises received capital of 927.8 billion yuan, -15% month-on-month and -17% year-on-year, and the decline was 1.1 percentage points narrower than in September. Dismantling the sources of capital for housing enterprises, sales continued to weaken, leading to a decline in the share of repayments, which had an obvious drag effect; the share of domestic loans remained flat but was also relatively weak, and it never played a positive driving role.
The performance of new construction is still weak, and the growth rate of completion has narrowed slightly
From January to October 2023, the new housing construction area was 791.77 million square meters, -23.2% year-on-year, and the decline was 0.2 percentage points narrower than in January-September; the completed area was 551.51 million square meters, +19.0% year-on-year, and 0.8 percentage points narrower than January-September. In October 2023, the new housing construction area was 70.54 million square meters, -14% month-on-month and -21.1% year-on-year, an increase of 6.5 percentage points over September; the completed area was 64.46 million square meters, +30% month-on-month, +13.3% year-on-year, and 12.1 percentage points narrower than September.
Risk warning: 1) The effect of policy implementation and the intensity of subsequent introduction fell short of expectations; 2) changes in the external environment caused industry fundamentals to decline beyond expectations; 3) the impact of the housing enterprise credit risk incident exceeding expectations.