For the real estate industry, the policy bottom, market bottom, and performance bottom do not occur simultaneously; there is a certain transmission time.
Currently, the policy bottom has already emerged, but the market is still searching for the bottom.
The financial reports of real estate companies in the next one to two years will still be in a bottom area with a tone of risk prevention and livelihood protection.
Since 2024, the real estate industry has continued to be sluggish, but there have been glimmers of hope during the downward process.
On one hand, the performance of listed real estate companies, housing prices in various regions, and the stock prices of real estate companies have all experienced rare declines.
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Coupled with the continuous tension in the capital chains of real estate companies, the current real estate situation is not optimistic.
Among them, the second-hand housing prices in China have fallen to the level of 2018 or even earlier, and the stock prices and performance of most listed real estate companies have fallen back to ten years ago.
On the other hand, although the sales data of real estate companies continue to decline, with the introduction of rescue policies by the central and local governments, some monthly sales data of real estate companies have shown a pulse-like recovery, which has brought hope to the market.
How to summarize the current complex real estate situation in one sentence?
In the view of Ren Zeping's team, the current real estate policy environment has approached the most relaxed stage in 2014, but the severity of the situation is the worst since the housing reform in 1998.
At the end of August, the mid-year reports of listed real estate companies in 2024 have been basically disclosed, providing a mirror for the market to observe the current situation of China's real estate.
Due to factors such as the decline in housing prices and asset impairment, the performance of listed real estate companies in the first half of 2024 was relatively low.
According to the "Finance and Economics" statistics, more than 40% of the listed real estate companies on the A-share market suffered losses in the first half of this year, and more than 60% of the real estate companies' net profit attributable to the parent company has fallen to the level of ten years ago (excluding companies listed after 2014).
The real estate companies that recorded losses include not only leading companies such as Vanke (000002.SZ, 2202.HK) but also some state-owned enterprises and central enterprises.
A person from a listed real estate development company told "Finance and Economics" that the sale of presale housing from the start to the time when the income is reflected in the performance of listed real estate companies generally takes about two years, and the time for presale housing that is close to completion is also more than half a year.
The net profit data of listed real estate companies in the first half of 2024 mostly reflects the sales situation of 2023 or even 2022, so the financial data of companies in the industry are not very good-looking in the first half of the year.
"From the appearance, the real estate market is still in the adjustment period, and the market continues to be in a low state.
Although the policy has been continuously optimized, the momentum for the recovery of the real estate market is still insufficient, resulting in the general pressure on the sales performance of real estate companies."
Zhang Bo, the dean of the 58 Anjuke Research Institute, told "Finance and Economics," "From the deep-seated reasons, it is caused by insufficient demand.
The changes in the macroeconomic environment and the adjustment of residents' income expectations have affected the consumer confidence of homebuyers, resulting in the continuous contraction of housing demand."
Looking at the performance of housing prices, according to the statistics of Founder Securities, as of June 2024, the housing prices of new and second-hand houses in 70 large and medium-sized cities have fallen by 7.1% and 13.2% respectively compared to the high point in mid-2021.
The adjustment of second-hand housing prices has lasted for three years, and it has now returned to around 2018.
Data released by the Real Estate Finance Research Center of the National Institute of Finance and Development shows that in the first half of 2024, the real estate market is still in a downward phase: housing prices have generally fallen, and the price of second-hand housing has reached the largest year-on-year decline since 2005.
In the first five months of 2024, China's new housing sales data fell by more than 20% year-on-year, which is the second time since 2022 that the decline has returned to double digits.
Data from the National Bureau of Statistics show that from January to May 2024, China's new commercial housing sales area and sales volume fell by 20.3% and 27.9% respectively year-on-year.
However, the data narrowed in June and July.
This change is also reflected in the monthly sales data of listed real estate companies such as Vanke.
In July this year, the real estate development prosperity index rose to 92.22, the highest since February 2024.
"From June to July, the sales situation of the company's real estate projects has indeed improved."
A senior person from a real estate company in Hebei told "Finance and Economics."
The above-mentioned listed real estate company told "Finance and Economics" that after a period of policy digestion, the sales of the company's commercial office properties have begun to improve, and some large transaction customers have started to place orders.
Looking at the stock price level, on August 29, the Wind Real Estate Industry Index (882011.WI) fell to a new low of 1622.02 points, and the last time it was below 1700 points was in March 2014.
Since the real estate industry entered the down cycle, the real estate sector has continued to decline, and it is difficult to find real estate companies with a market value of tens of billions of yuan in the A-share market.
Under the pressure of performance, housing prices, and stock prices, the financial situation of real estate companies has frequently emerged.
Before 2024, many domestic and foreign real estate company bonds had actual defaults, extensions, unpaid interest on time, and triggered cross defaults, involving well-known companies such as Country Garden (2007.HK) and Wantong Development (600246.SH).
Since 2024, the funds in place for real estate development companies have continued to decline.
However, after the decline reached 26% in the first quarter, the decline has gradually narrowed, showing signs of improvement.
At the same time, looking at the debt-to-asset ratio of listed real estate companies, it has also decreased compared to before.
Behind the signs of improvement in the above data is the frequent introduction of industry support policies by the central and local governments on both the demand and supply sides since 2024.
Among them, the demand-side policies include the basic exit of purchase restriction policies and the reduction of personal housing down payment ratios, aiming to boost housing demand; the supply-side policies include taking the protection of delivery as the core, introducing measures such as inventory collection, land return, and whitelists to alleviate the financial pressure on real estate companies.
In the context of the interweaving of housing price decline and rescue policies, how will the future trend of the real estate market go?
Many interviewed people believe that the policy bottom, market bottom, and performance bottom will not appear at the same time, and there is a certain transmission time.
Currently, the policy bottom has already emerged, but the market is still searching for the bottom, and the financial reports of real estate companies will still be in a bottom area in the next one to two years.
Many institutions predict that the decline in sales data in 2024 is expected to gradually converge.
At the same time, the market is looking forward to more policy implementation, such as continuous interest rate cuts, the complete cancellation of purchase restrictions, and the construction of a multi-level, multi-entity, and multi-channel real estate financing system.
Ren Zeping's team believes that the government needs to take more vigorous rescue measures in the future.
As the traditional "Golden Nine Silver Ten" sales season approaches, first-tier cities should seize this window of opportunity and take the lead in relaxing restrictions on suburban and large housing purchases to boost popularity.
In the industry's down cycle, the performance of the real estate industry in the first half of the year was generally low, and the performance of many companies reached a new low since listing.
However, with the dense introduction of support policies, the industry has shown a pulse-like recovery, which has also brought a glimmer of hope to the market.
As of August 30, 2024, 107 listed real estate companies on the A-share market disclosed the mid-year report (including the forecast), among which 46 companies' net profit attributable to the parent company suffered losses, accounting for more than 40%.
Among them, many real estate companies suffered losses for the first time, including Vanke A and Gemdale Corporation (600383.SH).
Among them, Vanke A had the largest loss.
As the leader of the real estate industry, Vanke A suffered a loss of 9.852 billion yuan in the first half of the year (compared to a profit of 9.87 billion yuan in the same period last year), a year-on-year decline of 199.82%, which is the company's first loss since listing.
At the same time, Gemdale Corporation and China Fortune Land Development (600340.SH) had net losses of 3.4 billion yuan and 4.8 billion yuan respectively, among which Gemdale Corporation also suffered its first loss since listing, and China Fortune Land Development, which is undergoing debt restructuring, saw a further increase in net losses.
The situation of real estate companies listed on the Hong Kong stock market is similar.
As of August 30, 93 real estate companies listed on the Hong Kong stock market have released mid-year reports or performance forecasts, among which 50 are expected to suffer losses, accounting for more than 50%.
Among them, Shimao Group (0813.HK) had a net loss of 22.668 billion yuan, and Sunac China (1918.HK) had a net loss of nearly 15 billion yuan.
Some real estate companies also maintained profits or turned losses into profits.
There are 61 real estate companies on the A-share market that are profitable, with a total net profit attributable to the parent company of about 21.9 billion yuan in the first half of 2024, among which Poly Development (600048.SH) alone had a net profit attributable to the parent company of 7.42 billion yuan, and China Merchants Shekou (001979.SZ) and other 10 companies had profits of more than 500 million yuan.
Most other real estate companies are in a state of small profits, with some only making a profit of several million yuan, walking on the edge of profit and loss.
Although it has made a profit, the net profit of Poly Development in the first half of the year still fell by nearly 40% year-on-year.
China Wuyi (000797.SZ) and other nine real estate companies have turned losses into profits through the sale of assets, bankruptcy reorganization, or the transfer of a single project.
The decline in sales performance, the high-priced land acquisition before, and asset impairment are continuously eroding the "money bags" of real estate companies.
Regarding the loss of performance, Vanke A pointed out that in the first half of the year, due to the significant decline in the settlement scale and gross profit margin of real estate development projects, the company provided for impairment on some projects, some non-main business financial investments suffered losses, and some bulk asset transactions and equity transactions were priced below the book value, resulting in a decline in performance.
"The main reason for the loss of real estate companies is still the impact of the overall real estate environment: first, the decline in sales volume, according to the publicly available data, the total sales of the top 100 real estate companies in the first half of 2024 fell by more than 40% year-on-year; second, the continuous decline in housing prices, leading to a decline in the value of inventory, and many real estate companies have provided for impairment on some projects from the perspective of the financial statements, especially in areas where the decline in housing prices is obvious, from a prudent perspective, the proportion of provisions will be even higher."
Zhang Bo told "Finance and Economics."
Hu Kunchao, an investment manager at Cheese Fund, told "Finance and Economics," "The financial statements of real estate companies are lagging behind sales.
Only when the house is completed and delivered can the income be confirmed, so the settlement cycle is about two years behind the sales cycle.
The current loss is the result of high-cost land acquisition and price reduction sales in previous years."
Data from the National Bureau of Statistics show that in 2022, the sales area and sales amount of commercial housing in China fell by 24.3% and 26.7% respectively, and in 2023, the above data fell by 8.5% and 6.5% respectively.Although the performance of listed real estate companies was not good in the first half of 2024, and the sales data of the real estate industry fell back into double digits compared to the same period, the decline has narrowed after a series of supportive policies were introduced in April this year.
From January to May 2024, the sales area of newly built commercial housing in China fell by 20.3% year-on-year to 366 million square meters, and the sales amount fell by 27.9% year-on-year to 3.57 trillion yuan.
In the first half of the year, the above data fell by 19% and 25% respectively, narrowing by 1.3 percentage points and 2.9 percentage points compared to January-May.
From January to July, the above data further narrowed to 18.6% and 24.3%, which also means that the decline in the above data in June and July has been shrinking month by month.
The pulse-like rebound in the above real estate sales data is also reflected in some listed real estate companies.
Vanke A's management said in July that Vanke's own sales volume has been increasing month by month since April.
At present, there are signs of stabilization in transactions in several core cities such as Shanghai, Shenzhen, Hangzhou, and Guangzhou, especially some improvement projects, and the sales situation is very good, which is a very good signal.
In the first half of 2024, Poly Development's signed area fell by more than 30% year-on-year, and the signed amount fell by 26.81% year-on-year.
In June, the company's signed area fell by 11.31% year-on-year, but the signed amount increased by 4.62% year-on-year.
The company's signed amount has narrowed for four consecutive months since March, and turned positive for the first time in June.
Ren Zeping's team released a report on August 24, saying that after the pulse-like rebound in June-July, due to the lack of follow-up policies, the real estate sales volume fell back in August.
"In June, the transaction volume of new and second-hand houses increased month by month, which led to the narrowing of the year-on-year decline in housing transactions in the first half of the year.
However, due to the lack of follow-up policies, the real estate transactions in July and August have obviously fallen back."
CRIC Research Center data shows that from August 1 to 11, in the transaction area of new houses in 30 key cities, the data of first-tier and second-tier cities fell by 17% month-on-month, and the third and fourth-tier cities fell by 14% month-on-month.
Since 2023, the sales of commercial housing and house prices have been in a slump, and these factors will be reflected in the financial statements of listed real estate companies in the following period, and the market is still not optimistic about the future performance of real estate companies.
Hu Kunchao told "Finance and Economics" that the industry's sales amount has been declining in the past two years, and in the next one or two years, the financial statements of real estate companies are still at the bottom, of course, the situation at the company level will be different, and it needs to be combined with the situation of sales and land acquisition costs.
"For real estate investment, the capital market pays more attention to the stabilization and rebound of sales area and sales amount."
In the view of the above listed real estate companies, the bottom of policy, market, and performance does not appear at the same time, there is a certain transmission time, and the bottom of policy has already appeared, and the market is still exploring the bottom.
"From 2024 to 2025, the financial data of listed real estate companies, it is not ruled out that some companies have already made a large amount of provisions in the previous two years, and the base has been very low, which can be reflected in the data as a rapid year-on-year increase in surface phenomena, but the absolute amount is unlikely to be high."
As the real estate market slumps, the financial pressure on real estate is also increasing.
However, from the latest data, the financial pressure on real estate has eased.
New housing sales and financing are the two main sources of funds for real estate.
Among them, credit, bonds, and equity are the three main channels for real estate companies to raise funds.
Looking at the credit situation, since 2024, although the funds in place for real estate development companies have continued to decline, the decline in related indicators has narrowed.
National Bureau of Statistics data shows that in the first half of 2024, the funds in place for real estate development companies were 5.35 trillion yuan, a year-on-year decrease of 22.6%.
In 2022-2023, the data fell by 25.9% and 13.6% respectively.
In the first half of 2024, among the funds in place for real estate development companies, domestic loans were 820.7 billion yuan, down 6.6%; foreign capital utilization was 1.3 billion yuan, down 51.7%; self-raised funds were 1.89 trillion yuan, down 9.1%; deposits and advance payments were 1.6 trillion yuan, down 34.1%; personal mortgage loans were 774.9 billion yuan, down 37.7%.
In 2023, the funds in place for real estate development companies were 12.75 trillion yuan, down 13.6% from the previous year.
Among them, domestic loans were 1.56 trillion yuan, down 9.9%; foreign capital utilization was 4.7 billion yuan, down 39.1%; self-raised funds were 4.2 trillion yuan, down 19.1%; deposits and advance payments were 4.32 trillion yuan, down 11.9%; personal mortgage loans were 2.15 trillion yuan, down 9.1%.
From the comparison of the above data, it can be seen that affected by the policy benefits such as the "white list", in the first half of 2024, the decline in domestic loans and self-raised funds narrowed, and the proportion increased.
On the other hand, affected by the decline in sales, the decline in deposits and advance payments, and personal mortgage loans has significantly expanded.
In the case of sluggish sales, bond financing has also become a major channel to alleviate the financial pressure on real estate companies.
Looking at the structure of bond financing, credit bonds are still the main force in financing.
In 2023, trust financing sharply decreased, and overseas debt financing sharply decreased in the first half of 2024.
According to the statistics of the China Index Academy, in 2023, the real estate industry achieved a total of 722.27 billion yuan in non-bank financing, a year-on-year decrease of 15.1%.
Among them, credit bonds fell by 9.1% year-on-year, and trusts fell by 71% year-on-year.
In the first half of 2024, the real estate industry achieved a total of 279.16 billion yuan in bond financing, a year-on-year decrease of 26.9%, and the decline has expanded year-on-year, and the financing amount of each channel continued to decline, among which credit bonds fell by 21.9% year-on-year, overseas bonds fell by 54.8%, and ABS (Asset-Backed Security, asset-backed securities) fell by 33.3%.
Looking at the issuing entities, the issuing entities of credit bonds are mainly central enterprises and local state-owned enterprises.
In the first half of this year, the issuance ratio of state-owned enterprises and state-owned enterprises exceeded 90%, and it has increased year-on-year.
"Under the tight financing environment, the financing advantages of central enterprises and state-owned enterprises are more obvious."
Zhang Bo said.
Looking at the financing cost, the financing cost of the industry has obviously decreased, affected by factors such as the recent decline in the scale of high-cost overseas debt financing, the change in the issuance structure of ABS, and the overall decline in interest rates.
According to the statistics of the China Index Academy, the average financing interest rate of the industry in the first half of 2024 was 3.10%, a year-on-year decrease of 0.7 percentage points.
Among them, the average interest rate of credit bonds was 3.03%, a year-on-year decrease of 0.62 percentage points; the average interest rate of overseas bonds was 5.6%, a year-on-year decrease of 1.66 percentage points; the average interest rate of ABS was 3.09%, a year-on-year decrease of 0.66 percentage points.
In terms of equity financing, since the end of 2022, the China Securities Regulatory Commission has introduced the "third arrow" of equity financing for real estate companies, and real estate companies have successively started to raise funds through rights issues or private placements, but most of them have been slow, and some real estate companies have even announced the termination of private placements.
Specifically, in the first half of 2024, China Communications Real Estate (000736.SZ) and Lujiazui (600663.SH) completed A-share private placements, raising a net amount of 438 million yuan and 1.797 billion yuan respectively.
Among them, the funds raised by China Communications Real Estate were halved, down from the original plan of 2.48 billion yuan to 438 million yuan.
Among the Hong Kong-listed real estate companies, Guangdong-Hong Kong Bay Holdings (1396.HK), China Shangcheng (2330.HK), Peking University Resources (0618.HK) and other mainland real estate companies listed in Hong Kong completed additional issues and rights issues, raising a total of 8.9 million Hong Kong dollars, 98.72 million Hong Kong dollars, and 34.2 million Hong Kong dollars respectively.
Although financial pressure still exists, there are also signs of improvement in the relevant data.
On the one hand, the decline in the funds in place for real estate development companies has narrowed.
After the data fell by 26% year-on-year in the first quarter of 2024, from January to July, the decline has narrowed to 21.3%, narrowing by 4.7 percentage points compared to the first quarter data.
Among the funds in place for real estate development companies, compared with the first quarter of 2024, the decline in domestic loans and self-raised funds from January to July narrowed by 2.8 percentage points and 5.9 percentage points respectively.
Behind the narrowing of the loan amount, it is the support of banks.
At the beginning of 2024, the Ministry of Housing and Urban-Rural Development and the State Financial Regulatory Administration jointly issued the "Notice on Establishing a Coordination Mechanism for Urban Real Estate Financing", requiring all regions to propose a list of real estate projects that can be supported by financing.
All regions have accelerated the implementation of the "white list" of real estate projects.
On August 21, the leadership of the State Financial Regulatory Administration said that commercial banks have approved 5,392 "white list" projects, and the approved financing amount is nearly 1.4 trillion yuan.
Zhang Bo told "Finance and Economics" that under the promotion of the "white list", the injection of funds in the first half of this year also paid full attention to private enterprises, and the financing amount has also reached a certain height, which has effectively promoted the delivery work of some real estate companies.
The narrowing of the decline in self-raised funds also shows that the financing situation of real estate has improved.
On the other hand, from the perspective of financial indicators, the debt pressure of real estate companies has also eased.
Wind data shows that the asset-liability ratio of the real estate sector in A-shares (CITIC) and Hong Kong shares (Shenwan) has dropped from 78% and 81% at the end of June 2023 to 75.17% and 65.72% at the end of June 2024; the current ratio (the ratio of current assets to current liabilities, used to measure the ability of a company's current assets to be converted into cash to repay liabilities before the maturity of short-term debt) has risen from 1.37 and 1.28 at the end of June 2023 to 1.45 and 1.29 at the end of June 2024.
In addition, in August 2024, the data released by the Real Estate Finance Research Center of the National Institute of Finance and Development shows that the number of new default entities of real estate company bonds is decreasing.
In the first half of 2024, there were 47 real estate bonds with domestic bonds that had actual defaults, extensions, unpaid interest on time, and triggered cross defaults, involving 21 issuing entities.
Among them, only Tianjian Real Estate and Dima Industry were new default entities for the first time, and the rest of the real estate companies were default entities before 2024.During the same period, the number of real estate companies defaulting on overseas debt or extending maturities reached 19, involving 21 issuing entities.
Among them, only Jinhui Holdings (9993.HK) and China South City (1668.HK) were newly added first-time defaulters, while the rest were real estate companies that had already defaulted before 2024.
Since April 2024, the real estate market, which has been in a slump, has been supported by a series of dense policy measures.
The main feature of this round of policies is the joint effort on both the supply and demand sides.
On the supply side, the core is to ensure the delivery of buildings, and the supporting policies mainly focus on alleviating the financial pressure of real estate companies, including policies such as land reserves, land returns, and "white list" projects with "full lending" where permitted.
On May 17th, the real estate work conference clearly stated that "land reserves" is one of the feasible methods for "inventory reduction."
He Lifeng, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, pointed out that in cities with a large inventory of commercial housing, the government can purchase on demand and buy some commercial housing at a reasonable price for use as affordable housing.
The meeting made it clear that "land returns" is also one of the sources of relief funds.
He Lifeng pointed out that the relevant local governments should start from reality and properly dispose of the idle residential land that has been transferred through methods such as recovery and purchase, to help real estate companies in financial difficulties.
At the same time, the Ministry of Natural Resources is studying the support for local governments to recover idle land from real estate companies through special bonds, to revitalize the undeveloped or unfinished land reserves, and to alleviate the difficulties faced by real estate companies.
The Real Estate Finance Research Center of the National Institute of Finance and Development pointed out that properly disposing of idle land and revitalizing land reserves can, on the one hand, reduce the waste caused by idle land; on the other hand, it can help companies (especially troubled real estate companies) to deal with or revitalize undeveloped land assets, which is conducive to alleviating the financial difficulties of real estate companies, reducing debt, and lowering financial risks.
On May 17th, at the regular policy briefing of the State Council, Dong Jianguo, Deputy Minister of Housing and Urban-Rural Development, said that further play the role of the urban real estate financing coordination mechanism to meet the reasonable financing needs of real estate projects.
"Urban governments promote projects that meet the 'white list' conditions to 'enter as much as possible', and commercial banks lend to 'white list' projects 'as much as possible', to meet the reasonable financing needs of construction projects."
Important support policies on the demand side include the basic withdrawal of housing purchase restrictions, the introduction of a "new for old" housing policy, the reduction of the minimum down payment ratio for personal housing loans, the cancellation of the national-level policy floor for personal housing loan interest rates, the reduction of the housing provident fund loan interest rate, and support for the "commercial to public" conversion of existing housing loan interest rates, etc.
The "517 New Deal" pointed out that the national-level down payment ratio floor for the first and second sets of housing has been reduced by 5% to 15% and 25%, respectively, the provident fund interest rate has been reduced by 25 basis points to 2.85%, and the housing commercial loan interest rate floor has been canceled.
Some securities firms pointed out that the 15% down payment ratio for the first set is the lowest since 2003, and the 25% down payment ratio for the second set is the lowest since 2007.
In terms of commercial loans, on May 17th, the central bank issued a notice canceling the national-level policy floor for the interest rates of commercial personal housing loans for the first and second sets of housing.
In terms of housing provident fund loans, starting from May 18, 2024, the interest rate for personal housing provident fund loans has been reduced by 0.25 percentage points.
After the adjustment, the interest rate for the first set of personal housing provident fund loans with a term of less than 5 years (including 5 years) is 2.35%, and the interest rate for the first set of personal housing provident fund loans with a term of more than 5 years is 2.85%.
After the "517 New Deal", many core cities have actively responded to the central call, successively canceled the lower limit of housing loan interest rates, and followed up by reducing the down payment ratio to increase demand release.
In terms of purchase restrictions, in July, the 20th Central Committee of the Party's third plenary session reviewed and passed the "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization", giving local governments more room for operation: fully granting urban governments the autonomy of the real estate market regulation, adopting city-specific policies, allowing cities to cancel or reduce housing purchase restrictions, and cancel the standards for ordinary and non-ordinary housing.
Entering August, the "commercial to public" policy for existing housing loans has been implemented in many places.
To save the interest expenses of homebuyers, Zhengzhou, Shenzhen, and other cities have announced the opening of commercial housing loan to public housing loan business.
Yan Yuejin, Deputy Dean of the Shanghai Yiju Real Estate Research Institute, said that more than 30 cities have started the "commercial to public" business.
Where is the market heading?
After the introduction of dense policies, the market has shown a pulse-like rebound.
The trend of the real estate market, the support of supporting policies, and how to continue to alleviate the difficulty of financing are still the focus of market attention.
For the trend of the real estate market in the second half of the year, the market has different views.
On August 15th, the spokesperson of the National Bureau of Statistics said at a press conference of the State Council Information Office that in July, the decline of some real estate-related indicators in China continued to narrow, but at the same time, it should also be seen that most real estate indicators are still declining, and the real estate market is still in adjustment.
In the view of Changjiang Securities, looking forward to 2024, the real estate industry is looking for a new equilibrium point, the total amount will accelerate into the equilibrium range, but the sharp decline phase is passing, and the year-on-year decline in sales is gradually converging; the overall housing price pressure is gradually digested, but there is still a large structural pressure in the core cities.
Ren Zeping's team believes that under a neutral scenario, by the end of 2024, the macroeconomy will enter a recovery channel, and the willingness of residents to buy homes will recover, coupled with the progress of re-lending and land reserves "inventory reduction" as scheduled, the relaxation of purchase restrictions in the peripheral areas of first-tier cities, and the increase in the national sales area of commercial housing may be able to reach the bottom.
Zhang Bo told "Finance" that this year, the year-on-year decline in the total sales amount of real estate companies has no suspense, but in the environment where policies continue to relax, it is expected that the year-on-year decline in the sales volume of commercial housing in the second half of the year will gradually narrow.
However, there may be significant differences in the market performance of different cities and regions.
At the beginning of 2024, the Real Estate Finance Research Center of the Five Daokou School of Finance of Tsinghua University, in conjunction with the China Index Academy, initiated the topic of "China Real Estate Market Trend Forecast Survey" and released a research report.
The report shows that the expectation of market stabilization in the real estate market has further weakened, and nearly half of the surveyed subjects believe that it will take more than three years for the market to stabilize.
How to continue to alleviate the financial pressure of real estate companies, the market also has different views.
Some securities firms pointed out that if the follow-up acquisition of commercial housing and the revitalization of land reserves and other related policies are successfully implemented, it may provide an "exit mechanism" for the unsold commercial housing and land inventory of real estate companies, further improving the cash flow of real estate companies and alleviating the market's worries about further depreciation of real estate company assets.
Pang Ming, Chief Economist and Director of Research Department of Jones Lang LaSalle Greater China, told "Finance" that in terms of funding, it is expected to focus on building a multi-level, multi-entity, and multi-channel real estate financing system, providing policy support and financial services equally to market entities of different ownerships, and better improving the efficiency of capital utilization in investment, financing, and operation.
CRIC believes that for real estate companies in danger, it is recommended that relevant departments should increase the speed and speed of clearing, and let the companies in danger achieve debt restructuring or bankruptcy liquidation through market-oriented means as soon as possible.
"For real estate companies that can still operate normally, the top priority is to grasp the existing policy to do a good job in debt continuation, such as through credit support policies, by using credit protection tools and other credit enhancement methods, by issuing new bonds to achieve borrowing and repayment, and by issuing ABS, REITs (Real Estate Investment Trusts) and other methods to revitalize operational properties."
After the pulse-like rebound of real estate sales data, the market is looking forward to more policies.
In the view of Ren Zeping's team, the current period is an important window for the introduction and implementation of policies, and it is necessary to seize the "Golden September and Silver October" window to increase the stability of the real estate market.
In the short term, the second half of the year needs a greater force of incremental policies.
Its suggestion is: to set up a large housing bank of more than 3 trillion yuan to purchase the land and commercial housing inventory of developers; to fully cancel the purchase restrictions, first-tier cities should seize the "Golden September and Silver October" window to take the lead in relaxing the purchase restrictions of the suburbs and large houses to boost popularity; to continue to lower interest rates, including reducing the interest rates of second-hand housing loans, to reduce the cost of purchasing a house.
In Pang Ming's view, on the demand side, first-tier cities and high-energy cities, although the probability of fully canceling the housing purchase restriction policy in the short term is relatively small, but it is expected that according to the specific performance of the real estate market, it will consider further reducing the intensity of the housing purchase restriction policy from the aspects of location range, housing grade, and related taxes.