The financing dilemma of real estate enterprises has not been fundamentally solved.
In 2023, the total financing of 80 typical real estate companies will decrease by 28% year-on-year.
Entering 2024, the introduction of real estate financial support policies will be accelerated.
On January 12, the Ministry of Housing and Urban-Rural Development and the State Administration of Financial Supervision jointly issued the Notice on the Establishment of a Coordination Mechanism for Urban Real Estate Financing to accurately support the reasonable financing needs of real estate projects.
As of the end of January, the first batch of real estate project "white list" has been released and has been pushed to commercial banks, involving a total of 3,218 real estate projects, and commercial banks have issued loans to 83 projects in 27 cities with a total of 178600 million yuan.
Although the white list opens the gate for the financing of real estate enterprises, not all real estate companies or real estate projects can obtain financing from financial institutions, and the major banks are still cautious about real estate loans.
For real estate companies, it is necessary to grasp the window period of the current favorable policies, adjust the marketing strategy of enterprises, and maintain stable and healthy development.
Since 2024, the financing environment for real estate enterprises has been quite favorable, and the financing needs of high-quality projects and private real estate enterprises have received high attention.
On January 12, the Ministry of Housing and Urban-Rural Development and the State Administration of Financial Supervision jointly issued the Notice on the Establishment of a Coordination Mechanism for Urban Real Estate Financing to accurately support the reasonable financing needs of real estate projects. Only half a month later, on the 26th, the Ministry of Housing and Urban-Rural Development held a deployment meeting for the urban real estate financing coordination mechanism to accelerate the implementation of the urban real estate financing coordination mechanism.
Even during the Spring Festival, Anhui, Hubei and other places are still implementing the white list of real estate financing and issuing relevant loans.
According to Xinhua News Agency, as of the end of January, 170 cities in 26 provinces have established urban real estate financing coordination mechanisms, proposed the first batch of real estate project "white lists" and pushed them to commercial banks, involving a total of 3,218 real estate projects. In the first batch of real estate projects, 84% of the projects are developed by private real estate enterprises and mixed-ownership real estate enterprises. After receiving the list, the commercial bank reviewed the projects in accordance with the regulations, and has issued loans to 83 projects in 27 cities with a total of 178600 million yuan.
On January 24, the People's Bank of China (PBOC) and the State Administration of the Financial Regulatory Commission (CFRC) issued the Notice on the Management of Operating Property Loans, which extended the use of loan funds to stock development business and debt repayment, and the mortgage ratio was also increased.
On the whole, the policy window has arrived, but the effect of implementation remains to be seen.
It is worth noting that the "white list" is only a push list, and the final decision is up to the financial institutions, and the current real estate industry risks are still in the process of being cleared, and the major banks are still cautious about real estate industry loans. Real estate companies need to grasp the window period of the current favorable policies, adjust their marketing strategies, and accelerate the decentralization of projects.
At present, the problem of difficult and expensive financing for most private real estate enterprises still needs to be solved.
In 2023, the total new financing of 80 typical 80 real estate enterprises will be 569.2 billion yuan, a year-on-year decrease of 28%. So far, the total financing of real estate enterprises has been negative for three consecutive years. The first negative growth occurred in 2021, when it fell by 24%, and in 2022, the downward trend in financing scale further expanded, with a decrease of 34% for the whole year, and the total amount of financing fell below one trillion yuan for the first time since 2016.
In January 2024, under the effect of financing support policies, the total financing of 65 typical real estate enterprises increased by 25 month-on-month5%, the scale of bond issuance increased by 274%。
From the perspective of debt maturity, the total maturity scale of real estate enterprise bonds in 2023 will be 696.8 billion yuan, while the issuance scale will only be 292.7 billion yuan, which is 138% higher than the issuance scale, which also means that real estate enterprises cannot cover the maturity of old debts by issuing new bonds.
In 2024.
The first and second quarters are still the peak of maturity, with a maturity scale of more than 150 billion, and the debt pressure of real estate companies in the first half of the year is still large. A total of 18 bonds matured in January, about 40.2 billion yuan after excluding the part that has been redeemed in advance, an increase of 17% month-on-month, and 19 bonds will mature in February, about 39.4 billion yuan after excluding the part that has been redeemed in advance, a decrease of 2% month-on-month.
Recently, the financing of real estate companies is still relatively sluggish, and real estate sales have not yet fully recovered, so it is still possible that more real estate companies will be exposed to debt defaults in the future, and liquidity problems still need the attention of the industry.
Recently, the financing policy has ushered in a window period, but the easing of the financing policy still needs to be actually implemented in order to form a strong support for real estate enterprises.
Judging from the bond issuance of real estate enterprises in January, 12 real estate companies successfully issued bonds, a decrease of 1 from the previous month, and the largest issuance of enterprises was Poly Development, which issued a total of 2.5 billion yuan of medium-term notes and 1 ultra-short financing of 2.5 billion yuan. The scope of bond issuers has not been expanded in a practical sense.
It is still difficult for insurers to obtain bank loans. The projects of a number of insuring real estate companies have entered the "white list" of real estate project financing in various places, but not many projects have been identified as financing from financial institutions.
At present, major banks have a cautious attitude towards real estate loans, because when banks handle loan collateral collateral, they give priority to collateral with relatively stable value and strong liquidity, and generally do not accept collateral that is not easy to realize, difficult to go through registration procedures or fluctuates greatly. However, most of the insuring real estate enterprises can be used for mortgage loans with fewer targets, and it is still unlikely to obtain bank loans under the market-oriented mechanism.
For real estate companies that can still operate normally, the top priority is still to grasp the window period of the current favorable policies, adjust the marketing strategy of enterprises, and accelerate the decentralization of projects. At the same time, it is also necessary to carry out structural adjustment of the land reserves of enterprises, especially to speed up the removal of stagnant inventories and the decentralization of low-level urban projects.
Real estate companies with diversified businesses can also accelerate the transformation process. Recently, the issuance of REITs has ushered in a number of positive factors, such as the Shanghai and Shenzhen Stock Exchanges agreed to five insurance companies to carry out ABS and REITs business on a pilot basis, and the China Securities Regulatory Commission (CSRC) has expanded the pilot asset types of public REITs to consumer infrastructure. Real estate operators with high-quality real estate projects can use public REITS to accelerate their strategic transformation and transform from developers to asset management service providers, which is of great significance for real estate companies to get out of the industry predicament.
Since 2024, the financing support policy has continued to be favorable, but the overall industry financing is still weak, and the debt pressure of real estate companies in the first half of the year is still large, so real estate companies need to seize the recent favorable policy window.
With the support of policies, there have also been some positive changes in the financing of real estate enterprises, and the scale of financing and bond issuance of typical real estate enterprises has rebounded month-on-month in January, but the sustainability still needs to be accelerated by supporting policies.
If the follow-up policies can be implemented, the financing environment for real estate enterprises will be improved, but for insuring real estate companies, it will also depend on the stabilization of industry fundamentals.
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Article**: Ding Zuyu commented on the property market