The Zhitong Finance App learned that Tianfeng Securities released a research report saying that in January, commercial residential sales prices fell month-on-month in 70 large and medium-sized cities, the number of cities decreased, and the overall decline in commercial residential sales prices narrowed month-on-month, and the overall decline continued year-on-year. The demand-side LPR was lowered beyond expectations. As the “four limit” adjustments in various regions under the city's policy framework have entered a new round of strength, it is expected to drive the centralized release of improved demand, and supply-side financing support such as white lists will continue to increase. It is expected that supply-side clean-up will basically come to an end in '24. Before the fundamentals of the industry stopped falling and stabilized, the bank believed that demand was unstable and that policies continued, and was optimistic that the two-way supply and demand policy would continue to drive the sector market.

Tianfeng Securities's views are as follows:

LPR was lowered beyond expectations, and incremental policy expectations were raised

On February 20, the central bank announced that the 5-year loan market quoted interest rate (LPR) was lowered from 4.20% by 25 bp to 3.95%, a single record high. Under the same circumstances where the 1-year LPR remained unchanged, interest rates were cut sharply, asymmetrically exceeding expectations. The bank believes that stabilizing the real estate market is highly targeted and strong. At the same time, “white list” applications in many places have achieved remarkable results. Up to now, 214 cities across the country have received more than 5,000 projects, and 162 projects in 57 cities have received a total of 29.43 billion yuan in bank financing, an increase of 11.3 billion yuan over pre-holiday periods.

The post-holiday sector market continued to strengthen, driven by supply and demand policies. The Shenwan Real Estate/Wind Hong Kong Real Estate Index rose 5.0%/4.0% respectively in the past 5 trading days. The bank believes that it is mainly due to 1) LPR exceeding expectations, and subsequent financial and industry policy incremental space is expected to further open up; 2) the white list contributed substantial benefits to housing enterprises and improved market sentiment; 3) the possibility of seasonal changes in early trading fundamentals in March is not ruled out. The bank is optimistic that the current round of supply and demand policies will continue to catalyze the market before fundamentals stabilized. It is expected that the gaming market is not over yet, and the sector's expectations for the first half of the year remain poor.

The “17 Rental Rules” were implemented quickly, and a gradient housing system was established

On January 5, the “Opinions on Financial Support for the Development of the Housing Rental Market” (“17 Leasing Rules”) issued by the Central Bank and the State Financial Supervisory Authority were issued. The aim is to speed up the establishment of a housing system combining multi-agent supply, multi-channel guarantee, and rental and purchase, and cultivate and develop the housing rental market. On February 21, the Chongqing Rental Housing Loan Support Program was piloted. Chongqing Jiayu Housing Rental Company and Chongqing Jianyu Housing Rental Fund acquired a total of 7 stock housing projects, totaling 4,207 units. After entering the market, they will effectively meet the multi-level housing rental needs of young people. In the future, Chongqing will actively guide the formation of a “rent first, buy, then improve” housing gradient consumption concept. The bank believes that in the future, financial loan plans for rental housing will be implemented one after another in more cities with a large stock of housing stock. With financial support, the rental market has good prospects for development, and at the same time, it will effectively help local inventories.

Price declines in 70 cities narrowed month-on-month, sending a positive signal

In January '24, commercial residential sales prices fell month-on-month in 70 large and medium-sized cities, and the number of cities decreased. The overall decline in commercial residential sales prices narrowed month-on-month, and the overall decline continued year-on-year. 1) On the new housing side, in January, sales prices of newly built commercial residential homes in first-tier cities were -0.3% month-on-month, and the decline was 0.1 percentage points narrower than the previous month. Among them, Beijing, Guangzhou and Shenzhen decreased by 0.1%, 0.8% and 0.7%, respectively, and Shanghai +0.4%. The sales price of newly built commercial residential homes in second-tier cities was -0.4% month-on-month, the same decline as last month. The sales price of newly built commercial residential homes in third-tier cities was -0.4% month-on-month, and the decline was 0.1 percentage points narrower than the previous month. 2) On the second-hand housing side, in January, second-hand residential sales prices in first-tier cities were -1.0% month-on-month, and the decline was 0.1 percentage points narrower than the previous month. Among them, Beijing, Shanghai, Guangzhou and Shenzhen fell 0.7%, 0.8%, 1.2%, and 1.6%, respectively. Second-hand residential sales prices in second- and third-tier cities fell 0.6% and 0.7%, respectively. The declines were 0.2 and 0.1 percentage points narrower than the previous month, respectively. 3) Looking at the number of cities where prices changed, in January, out of 70 large and medium-sized cities, sales prices for newly built commercial homes and second-hand homes fell month-on-month in 56 and 68 cities respectively, a decrease of 6 and 2 from the previous month, respectively. At present, the price side has sent a positive signal. Under the “buy up, don't buy down” sentiment, prices have stopped falling or are the basis for quantitative improvement. It is recommended to focus on high-frequency sales changes in first-tier and second-tier second-tier cities and volume price indicators for second-hand listed transactions to determine the recovery in demand. New and second-hand housing declined month on month, and the rate of removal at all energy levels slowed down.

The new housing market traded 1.34 million square meters this week, -69.33% month-on-month, down 72.35 pct from the previous month; cumulative inventory was 16.2.73 million square meters, and the elimination of the first tier, second tier, third tier and below slowed down. The second-hand housing market traded 1.03 million square meters this week, or -57.72% month-on-month, down 132.29pct from the previous month. The land market traded 4.92 million square meters this week, -12.26% year-on-year; total transaction volume was 1.5 billion yuan, 0.51% year-on-year in 12 weeks; the national average premium rate was 0.1%, rolling 12-week -0.33pct.

Investment advice: Demand-side LPR was lowered beyond expectations. As the “four limit” adjustments in various regions have entered a new round of strength under the city's policy framework, it is expected to drive the centralized release of improved demand, and supply-side financing support such as white lists will continue to increase. It is expected that supply-side clean-up will basically come to an end in 24 years. Before the fundamentals of the industry stopped falling and stabilized, the bank believed that demand was unstable and that policies continued, and was optimistic that the two-way supply and demand policy would continue to drive the sector market.

Target aspects: 1) Recommended high-quality real estate leaders: China Merchants Shekou (001979.SZ), Poly Development (600048.SH), etc.; 2) Recommended high-quality property management companies: investment balance (001914.SZ), Poly Property (06049), etc.; 3) It is recommended to focus on guaranteed housing and urban village renovation themes: Greentown Management Holdings (09979), Urban Construction Development (600266.SH), Tianjian Group (000090.SZ), Chinese enterprises (600675.SH).

Risk warning: industry credit risk spreads; industry sales decline exceeds expectations; because city policies fall short of expectations