Various data on the real estate industry from January to March 2024 are still low. As the three major projects, including urban village renovation, continue to advance, and the optimization and adjustment of core housing policies, future industry data is expected to bottom out and stabilize as policies continue to be introduced.
The Zhitong Finance App learned that the real estate industry data from January to March 2024 is still at a low level. With the continuous advancement of the three major projects, including urban village renovation, and the optimization and adjustment of core housing policies, future industry data is expected to stabilize as policies continue to be introduced and continue to be optimistic about investment opportunities in the sector. Under the relaxation of core city policies and the impetus of the three major projects, it is recommended to focus on housing enterprises with steady performance and high safety levels, including Binjiang Group (002244.SZ), Chinese enterprises (600675.SH), and recruitment Shang Shekou (001979.SZ) and Poly Development (600048.SH), etc., Hong Kong stocks suggest focusing on Greentown China (03900), Yuexiu Real Estate (00123), and China Resources Land (01109).
Incident: According to data released by the National Bureau of Statistics, from January to March 2024, the sales area of commercial housing was 226.68 million square meters, -19.4% year-on-year, and commercial housing sales were 2135.5 billion yuan, -27.6% year-on-year. The country invested 2208.2 billion yuan in real estate development, -9.5% year-on-year.
The main views of Zhongtai Securities are as follows:
Sales picked up month-on-month, and policies remained relaxed
The sales area of commercial housing in January-March 2024 was -19.4%, up 1.1 pct from January-February 2024, and -27.6% year-on-year in January-March, up 1.7 pct from the growth rate of January-February 2024. Affected by the high base, pace of supply and declining market popularity in March, the industry's sales growth rate continued to decline, but the growth rate rebounded month-on-month. According to Zhongtai Securities, it is mainly a reflection of insufficient demand in the real estate industry. Recently, key cities have continued to liberalize purchase restriction policies, and the mortgage interest rate side has also been optimized simultaneously. Zhongtai Securities anticipates that in the context of continued sales bottoming out, various relaxation policies in the industry are expected to be introduced at an accelerated pace and promote gradual stabilization of sales.
Investment declined, new construction declined, and completion data declined
Real estate investment in January-March 2024 was -9.5% year-on-year, down 0.5 pct from the growth rate in January-February 2024; the growth rate of new construction starts in January-March was -27.8%, up 1.9 pct from the January-February 2024 growth rate; the completed area in January-March was -20.7% year-on-year, down 0.5 pct from the growth rate in January-February 2024.
Zhongtai Securities believes that in a situation where the desire to acquire land and start new construction is low, industry investment data is still declining, and the monthly growth rate of new construction starts has declined sharply again. Against the backdrop that the intensity of land acquisition by housing enterprises is still declining, it will still be difficult for the growth rate of new construction to strengthen in the future. Taken together, in a situation where both supply and demand are weak, it is difficult to stabilize investment data in the short term, but it is expected that with continued strength on the policy side driving a gradual recovery in sales, housing enterprises are also expected to increase their efforts to acquire land, and industry investment data will bottom out and stabilize.
Funding source data continues to decline, and future improvements can be expected
Real estate development companies received -26.0% of capital from January to March 2024, down 1.9 pct from the growth rate in January-February 2024. By segment, the growth rates of domestic loans, the use of foreign capital, self-financing, deposit and advance payments, and personal mortgage loans were -9.1%, -11.9%, -14.6%, -37.5%, and -41.0%, respectively. All figures showed negative year-on-year growth, with personal mortgage loans falling the most. Currently, housing enterprises continue to experience debt default incidents, and the industry's financing channels are still shrinking, but as the Central Economic Work Conference stated that “real estate risks are actively and steadily mitigated and that reasonable financing needs of real estate companies with different forms of ownership are treated equally”, the “project financing white list”, and sales recovery brought about by demand-side policies, the funding situation available to housing enterprises is expected to gradually improve in the future.
Risk warning: Sales fall short of expectations, real estate policy relaxation falls short of expectations, and research report usage information is not updated in a timely manner.