I'm worried about the real estate transactions in January, whether it validates my earlier judgment that 2024 (at least the first half of the year) may not be better than 2023, but worse.
The reason is whether the so-called "debt-to-S-spiral" will appear, or whether it has already appeared. I can't answer this because of my limited level. However, looking at real estate alone, it is not good, and I feel that it is more likely to fall into the trap of "paying off more debts". People are afraid to consume, they are afraid to invest - * the overall level is down - then the company will have no income - and then they will continue to lay off employees and reduce salaries - and then people will be even more afraid to consume and invest in ......This has been the case over the past few quarters. Real estate is now purely supported by rigid consumption, and this is what they are worried about now.
The transaction in January shows the policy effect of the relaxation of credit policy in December last year, especially the "Super Week" in January this year, which is worth following up. But the follow-up conclusion: the market is not optimistic.
Looking at Shenzhen, 1,788 new houses were signed online in January, down 30% month-on-month and up 10% year-on-year; 3,463 second-hand houses were transferred, a slight decrease of 2 from the previous month3%, up 15 times.
If you just look at the year-on-year increase, it is easy to get a good understanding of the market. But this should be combined with special factors, there was a Spring Festival factor in January last year, so the performance of this year-on-year change is of little significance - it is normal to rise, and it is abnormal to fall, after all, there are many more trading days in January this year than in January last year.
Looking at the chart above, after the policy was greatly relaxed in September last year, the transaction volume of second-hand houses in Shenzhen began to rise three times in a row in the fourth quarter, one step away from the high point of 3,949 units in 2023, but it fell again in January. New homes have also risen three times since September, but since December, they have also turned downward.
This illustrates,The effect of the last round of dosing has reached the end of the crossbowThe marginal effect of the policy is decreasing faster than expected, and each major policy only takes a month or two. If there are no more fierce new drugs below, then the market in January is proof - meaningThere was a pause in the market。This is the first place to worry about us.
There is a "good news" that the leverage ratio of the household sector has come down - this reduces the risk of the financial system, but at the same time, it also shows that everyone's willingness to spend is really low.
Looking at the chart above, the leverage ratio of Shenzhen residents has been reduced to 85 in 20235%, which is the "debt threshold" – in 2011, according to the 18 OECD countries for the 1980-2010 financial flow table study, the debt threshold for the household sector was 85 (debt GDP). This is the third consecutive year that the leverage ratio of Shenzhen residents has fallen since at least the 2000s, and has fallen by more than 6 percentage points in three years
Looking back at history, we can see a different feature of this round of adjustment: in 2015, when the currency subsidy was destocked, Shenzhen saw the phenomenon of rapid leverage by residents, and the same is true in history, currency release = residents are leveraged. But 2022-2023 is different,It is extremely rare that the monetary policy continues to be loose and the residents continue to reduce leverage。This is a very, very different point, and it proves once again that monetary policy is ineffective under the expectation of the general s.
Behind the rapid decline in the leverage ratio is that the growth rate of Shenzhen's residents' debt is much lower than the growth rate of GDP. In the above-mentioned debt of Shenzhen residents of nearly 3 trillion yuan,The proportion of medium and long-term debt, which is mainly housing loans, is as high as 845%(It is stated that the main debtors of Shenzhen residents are housing loans). The added value of such loans from 2018 to 2023 is: 21748.2 billion, 17255 billion, 23160.2 billion, 23856.3 billion, 8229 billion, 2641.2 billion ......The new medium and long-term loans have dropped from more than 200 billion to more than 20 billion, and they are in free fall.
Brothers, are you afraid of a spotted leopard? Fang or not?
Let's look at the national market.
According to Kerry statistics, the sales amount of the top 100 real estate companies in January was 2350600 million, down 342%, down 479%，Monthly sales were the lowest since the pandemic
It's disturbing. The month-on-month decline is understandable, but compared with January last year, when there was a Spring Festival, it can still fall by 3%. What's more, we also released so many loudspeakers in JanuaryA new round of policy easing is clearly underway, and so on**. This is where I speak of market danger.
Look at the picture I posted yesterday, it's green.
When I saw it at the time, I immediately remembered Xu Wei's song "Once You": green, green, ......Fall down fall ......
Take Vanke as an example, Vanke's sales in January were 19.3 billion, down 30% year-on-year from 20236%, down 42. year-on-year from 20224%, how much has it fallen from the same period in 2021? 72.5%。
To exaggerate, not to mention all, the operating cash flow of most real estate companies will be negative in January. Relying on this, the developers will certainly not be able to repay the foreign debt. As I have emphasized before, I am more concerned about the local non-listed private real estate companies, whose information is more opaque, which makes the risks more hidden, and it is almost difficult to measure how deep the water is.
To sum up, what does all this mean? My opinion is threefold:
1) The market is voting with its feet。Buyers are expressing their anxiety about their future expectations, and they are also expressing their dissatisfaction with the policy grinding and falling short of expectations. Therefore, I said last time, what is the use of a RRR cut, there is no strong medicine, it will still fall.
2) Second-hand houses are becoming more cost-effective than new houses。Second-hand home transactions continue to outperform new homes. This was manifested in the national market last year, especially in the Shenzhen market, and it continues to be so, which illustrates:The continuous price reduction of second-hand houses has made them more cost-effective than new houses as a whole。Although people generally choose new projects with better product iterations, in view of the delivery crisis + ** control, "it is not that new houses cannot afford to buy, and second-hand houses are more cost-effective". Therefore, I personally expect that in 2024, it is necessary to liberalize the new housing price limit policy as soon as possible and return the leading power to the enterprise. Otherwise, under the conditions of ** control, there is no way for enterprises to hit second-hand houses. The policy cannot pinch the developer's neck and feed the medicine at the same time.
3) The market is approaching dangerous values。The transaction in January occurred under the condition of policy easing. But such a transaction will lead to two results: first, the "white list" will be longer and longer, and there will continue to be real estate in distress. Second, the continued downturn, the continued thunderstorm of real estate companies will be inevitable. If the house can't be sold, no one can stop it, can the bank alone save it for a while, and it can save a lifetime?
In February, it was necessary to give a "super policy".If the LPR drops, I won't even shave my head.
Change the ancient song and give it to the migrant workers in the torment: the cold wind is sorrowful and sorrowful, and the exit is also sorrowful, and the entry is also sorrowful. Who is in this room, and who is not worried? It makes me white-headed.