[industry Nuggets] the central bank policy injected cardiotonic agents, Hong Kong A real estate stocks continued to soar! Read the article to understand the strategy of stabilizing the property market

Since May 2021, the risk exposure of private real estate enterprises represented by Evergrande accelerated, and once caused the market panic about the investment of real estate stocks. The share prices of leading real estate enterprises such as Evergrande and Sunchuang continue to halve, Xuhui Holdings and many other outstanding private real estate enterprises default and extend their debts, the founder of Longfor Group leaves office, and investors lack confidence in the real estate industry, which further aggravates the cramped situation of real estate enterprises.

As the first pillar industry of the national economy, real estate is related to many physical industries, and it is the largest source of income of local governments, the most important wealth of residents and the largest risk exposure of banks. Based on the objective need to stabilize the basic economic market, the central bank policy has injected a boost into the real estate industry in recent months. On November 13, a document entitled "16 Financial measures to support the stable and healthy Development of the Real Estate Market" issued by the Central Bank and the CBIC spread in the market; under this stimulus, Hong Kong A real estate stocks soared strongly across the board; Xuhui Holdings, Country Garden Holdings and other property stocks rose more than 200% from recent lows, which also attracted wide attention from cattle friends. In this issue, [Industry Nuggets] will follow Niuniu to fully understand the policy of stabilizing the property market.

Classification of policies for stabilizing the property market

According to the research report of China Post Securities, the stable property market can be divided into three important fulcrums, namely, stable demand, guaranteed delivery building and stable main body.

Stabilize demand: stimulate residents' demand for housing

Living and working in a city, whether renting or buying a house, always needs a place to live. The demand for housing mainly depends on the ability and willingness to buy houses in the short term, and on the number and age composition of the population in the long run. The relevant policies are: local policy, monetary policy, tax reduction and so on.

Local policy: due to the strong regional characteristics of the real estate market, different cities will take different measures according to the attributes of the city. it mainly includes: purchase restriction policy, differential tax Xiaobai Maimai Inc policy, control of land supply and indemnificatory housing supply construction, etc.

The central bank's monetary policy: adjust LPR and add points, and then adjust the interest rate of personal housing loans.

Tax reduction and fee reduction of the Ministry of Finance: change of house and refund of tax, etc.

Baojiaolou: restore the confidence of property buyers

Due to the shortage of funds in housing enterprises, the emergence of unfinished buildings after thunderstorms damages the confidence and will of property buyers, and the policy of guaranteed delivery is gradually strengthened, which is conducive to restoring the confidence of property buyers.

1) at first, it was mainly to supervise and urge housing enterprises to save themselves, and the representative case was Evergrande after the explosion of thunder, supervision and supervision repeatedly urged Evergrande to guarantee delivery.

2) later evolved to encourage real estate enterprises to carry out market-oriented acquisitions, such as encouraging real estate enterprises to issue bonds and bills for mergers and acquisitions.

3) now it has entered a new stage, that is, to support the construction and delivery of overdue and difficult-to-deliver residential projects through special loans from policy banks.

Stable main body: ensuring the financing of Real Estate Enterprises

As private enterprises account for a relatively high proportion in the real estate industry, if private subjects lose credit support, it will lead to a shortage of effective supply, and then affect the release of confidence and demand of property buyers. The stable policy is mainly reflected in the continuous creation and implementation of financing tools. For example, in 2018, the people's Bank of China and relevant departments adopted a combination of "three arrows" from three financing channels: credit, bonds and equity. The 250 billion yuan of private enterprise bond financing launched on November 8 is mainly the "second arrow".

I believe you already have a certain understanding of the policy of stabilizing the property market, so what are your views on the recent "second arrow" and the 16 real estate support measures jointly issued by the central bank and the CBIC? What impact will this have on the market?

Interpretation of current policies

@敖丁阿- 《16 measures of Finance support the marginal change of the steady and healthy Development of the Real Estate Market》

In terms of the content of the policy, there are three main marginal changes:

1) the formal mention of "reasonable rollover" has not been put on the table before, to exchange time for space, avoid the risk of run, stabilize the capital chain of real estate enterprises, and ensure delivery as the top priority, but after the rationalization of the extension, bond issuance may need more credit.

2) the formal mention of "conditional exemption" is the core highlight of the document. For "good projects" with abundant surplus value, the pace of guaranteed delivery is expected to accelerate, but it also emphasizes the principle of marketization and the premise of commercial voluntary. as a whole, it is still within the policy framework expected by the market, and the "poor project" remains to be solved in the short term.

3) the extension of the "transition period" of loan concentration mainly reflects the gradual loosening of regulatory attitude, but there are not many banks that exceed the standard, and what is lacking is not the supply of funds, so it is of limited significance to promote the actual investment.

At present, it is still in the "policy upper / lower cycle" stage, reiterating that volatility is a major trend; the policy is expected to dominate the short-term market, the problem has not yet been substantially solved, the policy still has further space, and is currently in the accelerated stage; the marginal improvement of the real estate financing environment of private enterprises is expected to have marginal repair of risk appetite, especially for non-risky private enterprises with high-quality assets. Efficient state-owned enterprises are still the long-term winners of pattern optimization, although the short-term flexibility is slightly less, but the long-term can cross the cycle.

@我才不要做价投《Is it to protect or save?》

I just saw it.【Notice of 16 Financial measures to support the stable and healthy Development of the Real Estate Market], to sum up:

The content involves maintaining the stability and order of real estate financing, actively doing a good job of "Baojiaolou" financial services, actively cooperating with the risk management of stranded real estate enterprises, protecting the legitimate rights and interests of housing financial consumers in accordance with the law, and periodically adjusting some financial management policies. increase housing rental financial support and other six aspects, a total of 16 specific measures. Among them, in terms of maintaining the stability and order of real estate financing, the circular particularly points out that if it expires in the next six months from the date of issuance of the notice, it may be allowed to extend by one more year beyond the original provisions, and the classification of loans may not be adjusted, and the classification of loans in the credit information system shall be consistent with it.

Some market participants have called it an "epic" real estate bailout, but the bailout has already explained its nature. The main purpose of this notice is to maintain the healthy and stable development of the current real estate market, that is, to stabilize leverage and financing, so as to avoid systemic risks caused by deleveraging and acceleration, rather than going back to the old path. The previous development model of high leverage and high turnover in the real estate industry has become a thing of the past.

Niu friends look forward to the future.

@亮眼看财经《With the introduction of 16 financial support measures, has the inflection point of the real estate market been established?》

On Friday, a number of real estate stocks and listed companies related to the real estate industry chain rose sharply. Among them, Vanke A, Poly Development, Jindi Group and other large market capitalization real estate stocks have a rising trend. Hong Kong real estate stocks soared even more, with well-known Hong Kong property stocks such as Country Garden Holdings and Longfor Group rising about 30 per cent in a single day, reversing the negative decline in the past.

The substantial changes in real estate stocks, on the one hand, are related to the factors of technological rebound, and there is a greater demand for valuation repair; on the other hand, there may be good news leaked in advance. 16 measures of financial support were introduced last weekend, which has brought positive policy and environmental support to the stable development of the real estate market.

With the introduction of a series of policies and measures, there are signs of policy bottoming out in the real estate sector, and there are also a number of prescient funds entering the market, combined with the huge decline of real estate stocks in the early stage. this round of rebound in real estate stocks should not end easily, but to return to a bull market, I am afraid it is not easy.

@看财经V 《Metro Holdings plans to issue 15 billion yuan of bonds, what is the impact of "16 Financial articles"》

Companies like Vanke A, Poly Development and Metro Holdings have not stepped on the three red lines. This means that after the introduction of the "16 articles", these companies are expected to gain more initiative by virtue of more sound financial affairs, especially in mergers and acquisitions of troubled real estate enterprises.

In other words, in the trough of real estate, high-quality companies are expected to further improve their market share!

Finally, a brief talk about "Baojiaolou". In terms of Baojiaolou, "support policy banks to provide 'Baojiaolou' special loans, and encourage financial institutions to provide supporting financing support". However, in the past year, for home buyers, they are increasingly inclined to buy large developers with stronger financial strength, or simply buy existing or quasi-existing housing instead of short-term housing.

In a word, the real estate industry is no longer a "comprehensive prosperity", but an era of differentiation!

The hot topic of real estate stocks

Hong Kong internal housing stocks continue to strengthen, the market or pick up?

Is it good for the property market to welcome heavyweights? Hong Kong An inner housing stocks are strong and open higher.

Write at the end

After understanding the main policies of stabilizing the property market, what thoughts and gains do we have? Are you also interested in the logic of recent hot spots and opportunities? Welcome to leave a message in the comments area.

references

China Post Securities Real Estate Industry Weekly report 2022.11.05-2022.11.11

Ren Zeping | it's time to stabilize the property market.

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