Sales growth continues to slow down
Although the housing enterprises actively promoted the market at the end of the year, they still cannot change the trend of slowing sales growth.
According to the data released by Ke Rui, the sales volume of the top 100 real estate enterprises in November reached 895.3 billion yuan, a year-on-year increase of 24.5%, but the year-on-year growth rate decreased by 7.5 percentage points from October. Since the second half of this year, the sales growth rate of the top 100 real estate enterprises has been declining since July.
Although the sales volume of the top 100 real estate enterprises increased by 9% in November, which ended the decline in the growth rate in October, Minsheng Securities pointed out that this was mainly due to the large number of housing enterprises entering the market at the end of the year, and actively pushing the market. It will be flatter than that in November, and the sales growth rate of the top 100 real estate enterprises is still worrying.
The rate of decontamination has not been expected to largely break the hope that housing companies will rely on increased supply rebound at the end of the year. CICC’s statistics on 10 key cities show that although the cumulative volume of sales in November increased by 45% year-on-year, the sales rate dropped by 6 percentage points from 65% to 65%, down to the historical bottom level.
Yan Yuejin, research director of the Yiju Research Center, expects that the inventory of new residential buildings in Baicheng will continue to rise in November and December. Such inventory movements may force the housing companies to actively reduce prices to speed up the de-sale of the saleable items, and ultimately complete the annual sales target.
However, Kerry said that nearly half of the top 100 real estate companies in 2018 proposed annual sales targets, and as of the end of November, although nearly 10 real estate companies completed their annual tasks ahead of schedule, the market remained sluggish at the end of the year. Pushing the rate of project decommissioning is generally less than expected, and many companies are difficult to complete the annual target.
“The leading enterprises such as Vanke and Country Garden are not raising their sales targets. In the future, they are more about pursuing high-quality growth. However, there are still many housing companies that put sales growth first, and the development in these years has been more radical. The growth target is more than 50%. For them, the pressure at the end of the year is very large." A person in charge of a medium-sized housing company in Beijing said.
"Winter mode" is on
The growth rate of sales continued to slow down, forcing real estate developers to open up and reduce expenditures and start the “winter modeâ€: On the one hand, since November, major housing companies have increased their financing; on the other hand, housing companies have become more cautious.
Since November, housing companies have set off a new round of financing climax: Poly Real Estate's 10 billion yuan long-term medium-term notes were approved, Country Garden plans to issue convertible bonds to raise 1 billion US dollars, Evergrande issued 1 billion US dollars of senior notes, Huaxia Happiness issued 80 Billion corporate bonds... rough statistics, regardless of IPO, the amount of housing financing in November has exceeded 100 billion yuan.
The financing cost can not be underestimated, and the financing cost of many housing enterprises is around 10%. For example, on October 31, Evergrande announced the issuance of a total of $1.8 billion in senior notes, including a five-year note rate of 13.75%. The annual bond rate of the first bond issued by Hongyang Real Estate has reached 13.5%.
Relatively speaking, state-owned enterprises are more calm in terms of financing. A person in charge of a real estate state-owned enterprise in Beijing told the China Securities Journal: "This year, the SASAC asked us to reduce the debt ratio, so our financing is not very urgent, the debt ratio is around 78%, and the financing cost is around 5.3%. The financing channel has both US dollar debt, Corporate bonds, perpetual bonds, and low-cost insurance financing."
In terms of land acquisition, the data of Zhongyuan Real Estate show that from September to November, the total amount of land acquisition by 25 leading real estate enterprises in the real estate industry was 76.7 billion yuan, 72 billion yuan and 39.4 billion yuan respectively, which was less than 100 billion yuan for three consecutive months. This has happened for the first time in the last 4 years. Before 2018, the amount of land acquired by leading real estate enterprises was between 120 billion yuan and 200 billion yuan per month.
“While the land supply in the next second-tier cities has increased significantly, most of the active participation in the land market is state-owned enterprises. At present, most of the land parcels have various supporting requirements, and the policy of limiting prices and restrictions makes the leading real estate enterprises take the land in the first and second tier cities. The enthusiasm of the auction market has been sharply reduced.†Zhang Dawei, chief analyst of Zhongyuan Real Estate, told the China Securities Journal.
At the same time, the land acquisition mode of Vanke and other leading real estate companies has changed. For example, after spending 3.234 billion yuan in October to win 80% of the shares of Huaxia Happiness Real Estate Project Company, in November, Vanke won 100% equity and 1 real estate of 4 real estate project companies under Jiakai City for 355 million yuan. 75% equity of the project company.
Regulation and introduction of frequency reduction
In the bleak November, housing companies ushered in a year-end decisive battle in December, but under multiple pressures, the outlook is not optimistic.
“The follow-up market will gradually enter the supply increase cycle. The third-tier cities that supported the overall market increase have recently experienced a lack of growth, and the hotspots in the first- and second-tier cities have also experienced a general cooling. Under the background of increasing debt repayment pressure and slowing down the project, Housing companies may choose to exchange funds at a price to ensure capital turnover and sales targets." Zhang Dawei believes.
The only good news is that the frequency of regulatory policy measures has been reduced. According to the data of Zhongyuan Real Estate, the total number of adjustments in the first 10 months of this year was 410, a year-on-year increase of more than 80%. Even if there was a National Day holiday in October, the number of adjustments was still as high as 24 times, but the number of adjustments in November dropped to 20 times.
Zhang Dawei believes that the reason for the decline in the number of adjustments in November is that on the one hand, the rate of increase in the property market has slowed down significantly; on the other hand, since the beginning of this year, the implementation of local regulatory policies has been very strict, and there is little room for further regulation and control.
Huachuang Securities believes that the current regulatory policies have achieved results, and it is difficult for the policy to be further tightened. At the same time, the economy is under downward pressure and remains stable or more critical.
However, industry insiders interviewed by China Securities Journal generally believe that the possibility of short-term relaxation of the property market regulation policy is very small.
In the view of China Merchants Securities, the current real estate policy is the rhythm of “social dance stepâ€: the policy margin continues to improve with the macroeconomic downturn, but it is difficult to have a comprehensive relaxation policy for the industry. Industry policy follows the economic changes and fine-tuning of the industry rhythm. It can be described as "you go further, I take a step back." The short-term administrative control measures are difficult to withdraw immediately, and the long-term mechanism is difficult to launch quickly is the main feature.
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