This time, quantitative indicators have been set for the financing support of non-state-owned real estate enterprises, and the scale of covered enterprises has been greatly expanded.
Xue Yuwen. Following the symposium of financial institutions jointly held by the three departments, a number of banks have recently convened meetings with real estate enterprises to exchange views on corporate financing needs, project docking, bond underwriting and investment. On the one hand, the bank-enterprise symposium is to implement the previous regulatory requirements;On the other hand, it is to find out the situation of various real estate enterprises and prepare for the follow-up financing support.
Due to the quantitative index requirements for the financing support of non-state-owned real estate enterprises this time, and the scale of covered enterprises has been greatly expanded, it is still necessary to pay attention to the specific implementation of policies and the recovery of market information and demand in the future.
Financing easing has been increased
Recently, the financing of real estate enterprises has once again attracted attention. The first financial work conference held at the end of October emphasized that it is necessary to improve the main supervision system and capital supervision of real estate enterprises, improve the macro-prudential management of real estate finance, meet the reasonable financing needs of real estate enterprises of different ownership without discrimination, and make good use of the policy toolbox according to the city's policies, better support the demand for rigid and improved housing, accelerate the construction of "three major projects" such as affordable housing, and build a new model of real estate development.
On November 17, the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission jointly held a symposium for financial institutions to discuss a number of real estate financial easing policies. The regulatory authorities require all financial institutions to meet the reasonable financing needs of real estate enterprises under different ownership systems without discrimination, and do not hesitate to lend, draw loans, or break loans to real estate enterprises in normal operationWe will continue to make good use of the "second arrow" to support private real estate enterprises in issuing bonds and financing, and support real estate enterprises to raise reasonable equity through the capital market. In specific aspects, the meeting put forward "three not less than": the growth rate of real estate loans of each bank itself shall not be lower than the average growth rate of real estate loans in the banking industry;The growth rate of corporate loans to non-state-owned real estate enterprises shall not be lower than the growth rate of local real estate;The growth rate of individual mortgages for non-state-owned real estate enterprises shall not be lower than the growth rate of mortgages of the Bank.
Since the second half of 2022, the "three arrows" and 16 financial regulations have been promulgated successively, but at present, the improvement of the capital of real estate enterprises is still not ideal, and the flow of funds to non-state-owned real estate enterprises is relatively limited. From January to October 2023, the total amount of real estate development funds** decreased by 13 year-on-year8%, the decline was further expanded from the previous months, and the absolute value fell to the level of about the same period in 2015, and the development funds fell significantlyFrom January to October, the cumulative amount of real estate funds in place increased by **14 year-on-year2%, also a large decrease. In addition, according to Huatai ** data, in the first three quarters of 2023, the scale of domestic real estate bond issuance decreased by 8% year-on-year, with a net repayment of 12.8 billion yuan, of which Chinese central enterprises accounted for 91% of the scale of domestic bond issuance, an increase of 33 percentage points over the whole year of 2020, achieving a net financing of 97.5 billion yuan, while private enterprises in the broad sense (including private, foreign-funded, public, collective enterprises, etc.) had a net repayment of 110.3 billion yuan.
The "three not less than" of this meeting made clear requirements for the degree of financing support for real estate enterprises, especially for non-state-owned real estate enterprises, at the level of specific indicators. Previously, the "16 Articles of Finance" had proposed that all kinds of real estate enterprises such as state-owned and private enterprises should be treated equally for development loansOn this basis, the credit support provided by non-state-owned real estate enterprises is quantified, with the aim of avoiding excessive tilt of loans to state-owned real estate enterprises, and has a strong orientation to the problem of financing difficulties of non-state-owned real estate enterprises.
According to CRIC's interpretation, "the first not less than" aims to create a competitive atmosphere in the industry, from passive lending to active loan seeking, to alleviate the lack of liquidity and credit problems of real estate enterprises;The second "not less than" is aimed at the financing difficulties of non-state-owned real estate enterprises, because this type of real estate enterprises is the core area of debt default, and the provisions will help to resolve the debt risk of such real estate enterprises;The "third not less than" is to start from the demand side, ensure the sales collection expectations of non-state-owned real estate enterprises, and achieve continuous improvement in the operating conditions of non-state-owned real estate enterprises by enhancing the delivery of personal mortgage loans.
Tianfeng ** pointed out that after the "financial 16 articles" for some real estate enterprises credit scale has increased, but there is still room for improvement, the meeting at the specific index level to stipulate the lower limit of the bank's financing support for private enterprises, the financial institutions will take the lead in weakening the tendency of credit qualifications, or the premise of residents to break the "faith in state-owned enterprises" and alleviate default concerns, the recovery of sales of private enterprises may also play a leading role. "Three not less than" may mean that the growth rate of the bank's overall real estate business may increase compared with the past, and the bank will avoid "lagging". Bank of China ** believes that the easing of financing policies must have the actual landing is the most powerful support for real estate enterprises, and banks will most likely still relax financing from the perspective of their own risk management, but from the perspective of signal significance, it has injected a certain amount of confidence into the market, and partially alleviated the serial credit panic of private real estate enterprises and insuring real estate enterprises.
According to the first news, as of December 4, all six major state-owned banks have held symposiums to communicate face-to-face with real estate companies and listen to the financing needs of real estate enterprises.
Follow-up needs to pay attention to the specific implementation of the policy. With the implementation of follow-up financing, the cash flow pressure of private real estate enterprises will be alleviated, and the credit risk of the industry is expected to stop spreading.
Which ones are whitelisted?
In addition to the "three not less than", market sources say that 50 large-scale real estate companies may be included in the "white list" of real estate enterprises, and will receive support from various aspects, including credit, debt and equity financing. According to the news, the white list will cover Xincheng Development, Vanke and Longfor Group, etc., and even include real estate companies that are out of insurance, and the coverage will be expanded compared with high-quality real estate companies at the beginning of the year.
Since 2022, the list of financial support for real estate enterprises has expanded, and according to agency statistics, a total of 13 private enterprises have benefited from the "second arrow" since 2023. The expansion of the number of companies on the whitelist to 50 means that more non-state-owned real estate enterprises may receive financial support.
Regarding the selected real estate enterprises, China Real Estate News said that in terms of form, the white list may be drawn up by the financial institutions themselves, first by the central bank for window guidance, and the last 50 listed enterprises by each commercial bank to claim the plan;In terms of scope, or preliminarily screen according to the top 50 in the sales list. In the context of weak recovery momentum on the demand side, the core goal of the policy is to alleviate the recent impact of weak sales, the cash flow pressure of large high-quality real estate enterprises has intensified, and the credit risk of the industry has expanded again. High-quality non-state-owned enterprises that have not been out of risk have a high probability of being selected into the white list, which is the focus of this adjustment, such as Vanke, Longfor, Xincheng and other private enterprises that have been supported by the second arrow, such as Midea and Excellence, which have been mentioned in this meetingAt the same time, it does not rule out the possibility of greater financing support for real estate companies that have been out of danger but are still operating steadily and have the task of ensuring the delivery of buildings, such as Country Garden, Sunac China, etc., which are among the top 50 in sales.
In the list of China's top 100 real estate companies in 2021 previously announced, 39 have defaulted (including delisting), and 26 of the top 50 real estate companies have defaulted. If the selection criteria of the whitelist are based on the sales scale as an important reference, does it mean that defaulting real estate companies can also receive financial support?
Some people in the industry pointed out that although the policy requires that all kinds of real estate enterprises be financed without discrimination, for real estate enterprises within the three red lines, banks should still take risk control as the minimum standard and carefully consider their repayment ability after financing.
Kerry also said that if the whitelist news is true, it is undoubtedly a major positive for the real estate companies that are out of risk, but for commercial banks, how to control the risk in practice will be a major difficulty, and banks may remain relatively cautious about this kind of loans.
Policies to be implemented
According to the sales data of real estate companies released by the China Index Research Institute, the monthly sales in November fell by 29% year-on-year2%, down 06%；The total sales of the top 100 real estate companies in the first 11 months were 5,732.9 billion yuan, a year-on-year decrease of 147%, a decrease of 1 compared with the previous month6 percentage points. From January to November, the average sales volume of the top 10 real estate companies was 2523700 million yuan, a year-on-year decrease of 93%；The average sales volume of TOP11-30 real estate enterprises is 779200 million yuan, a year-on-year decrease of 146%；The average sales value of TOP31-50 real estate enterprises is 379500 million yuan, a year-on-year decrease of 177%；The average sales value of TOP51-100 real estate enterprises is 179400 million yuan, a year-on-year decrease of 251%。
Although the overall market has declined, there are still real estate companies with better sales performance, which basically belong to central enterprises and state-owned enterprises.
According to the data of the China Index Institute, from January to November 2023, the sales of China Shipping, China Resources, C&D, Yuexiu, Huafa, Lianfa and other enterprises increased by more than 10% year-on-year.
Statistics from 40 mainstream real estate companies tracked by Dongxing** show that in 2022, the cumulative sales of commercial housing in central enterprises and state-owned enterprises (10) will grow by -13 year-on-year2%, while the year-on-year growth rate of non-central enterprises and state-owned enterprises (30) was -4927%；In 2023, the cumulative sales of commercial housing in central enterprises and state-owned enterprises (10) will grow by 10 year-on-year05%, while the year-on-year growth rate of non-central enterprises and state-owned enterprises (30) was -3107%。
Dongxing ** believes that in the context of the large-scale credit crisis of private real estate enterprises, central enterprises and state-owned enterprises have gained obvious credit advantages in both sales and financing, which is one of the main reasons for the overall leadership of central state-owned enterprises.
From the demand side, the current industry sales recovery is relatively slow, Dongguan ** pointed out that this is mainly due to the fact that residents are still cautious about the later housing prices, economic prospects and expectations for future personal income, and the demand side is difficult to effectively release, so the effect of continuous policy introduction in the early stage is still average. On the other hand, the current overall debt ratio of real estate enterprises has declined, and the development funds have continued, which is related to the active contraction of real estate enterprises to acquire land and development investment, and also has a certain relationship with the reluctance of financial institutions to lend to the real estate industry. The regulator put forward a quantitative "three not less than" requirements for banks this time, which is expected to effectively increase the amount of loans from banks to real estate enterprises and individual mortgages, thereby effectively boosting the capital of the industry and improving the situation of weak supply and demand in the industry.
The follow-up real estate optimization and stimulus policies are expected to be further increased, which will help the industry get out of the bottom of this cycle.
The follow-up implementation of "three not less than "will be conducive to the steady operation of non-state-owned real estate enterprises financing and performance improvement."
At present, the industry's supply-side policies are gradually increasing, and the financing of non-state-owned real estate enterprises is expected to bring about operational improvements and inject confidence into the market.