After the reform of the housing system in 1998, the market-oriented development of China's real estate industry was opened, and the real estate industry ushered in 20 years of rapid development. From 2016 to 2021, the sales of commercial housing in China reached a historical peak, with an annual average of 1.7 billion square meters, and the limelight was unparalleled for a while. However, while the scale of real estate sales peaked in 2021, the market has gradually cooled in the second half of the year, and real estate sales will continue to decline sharply in 2022, and the recovery this year does not seem to be satisfactory. What will happen to the real estate market in the future?Does the real estate sector still have allocation value?
Why did real estate sales usher in an inflection point in 2021?On the one hand, a series of real estate regulation policies that began in 2020 have brought huge challenges to highly leveraged real estate companies that rely on financing to maintain normal capital turnover. Since the second half of 2021, with the continuous tightening of regulatory policies and credit conditions, market expectations have gradually changed, and the high incidence of liquidity crisis in real estate enterprises in the second half of the year has further hit the confidence of home buyers. On the other hand, the epidemic has increased the uncertainty of residents' income, and the lack of confidence in residents' future income has suppressed residents' willingness and space to increase leverage. From a longer-term perspective, from 2021 to 2022, Chinese households have basically achieved one suite per household, and China's housing contradiction has turned from a total shortage to a structural shortage of supply.
Data**: Right-hand wind, as of June 30, 2023;Right picture of Minsheng**, as of 2022-12-31
The large cycle of the real estate industry is determined by the changes in the total population and structure, and the mismatch between supply and demand under the influence of policies has brought about the fluctuations of the small cycle of real estate.
Since the "three arrows" of real estate policy in the fourth quarter of 2022, the real estate industry has experienced a relatively long policy window period in the first half of 2023, and the recovery is not satisfactory. Entering the second half of the year, the Politburo meeting in July reviewed the situation and proposed that "the relationship between real estate supply and demand in China has undergone major changes", and set the tone of "timely adjustment and optimization of real estate policies". Recently, Shenzhen, Shanghai and Beijing have optimized and adjusted their real estate policies again, involving reducing the down payment ratio, lowering the lower limit of mortgage interest rates, and adjusting the standards of ordinary residences. The continued easing of real estate policies, with both the demand side and the supply side, is expected to promote the recovery of the real estate market to a reasonable and healthy level.
Historically, the inflection point of real estate stock prices has been ahead of the inflection point of real estate sales, and stock price performance has tended to be a game of policy. With the shift of industry policies and the low valuation of superposition, the sector is expected to have certain value revaluation opportunities under policy care and expectation improvementAt the same time, the real estate industry is changing from the old development model of pursuing speed and quantity to a new model of high quality, new technology and good service.
However, the current supply and demand side of the real estate industry is still facing constraints, one is that residents' income expectations are weaker than the previous "stable real estate" cycle, and the other is that the financing environment of real estate enterprises is still tight, so the follow-up fundamental repair height or limited, to make "stable real estate" from quantitative to qualitative change, it is necessary to effectively activate residents' demand by stabilizing expectations, stabilizing employment and raising income.
Data**: Wind, as of 2023-12-20
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