Fitch: The large-scale recovery of new house sales is the biggest key to the recovery of the industry and private enterprises

(Related data drawing)

On November 25, Zhonghuanet Finance and Economics News: It is reported that Jin Tailun, the real estate rating director of Fitch Ratings in Greater China, pointed out that in the first ten months of this year, the sales of new homes in the mainland fell 28% year on year, and the industry's sales have been in negative growth for 15 months. He believes that the current sales are showing signs of stabilizing, and believes that the existing policy direction has played a stabilizing role, If the monthly sales can maintain the current level, it is expected that the sales in 2023 will be stable or 5% higher than that in 2022.

Although the sales have slightly improved, the real estate enterprises' willingness to invest is still weak. In particular, the situation of new construction or land auction can be seen that the year-on-year decline is still 40% to 50%, mainly because there is a clear gap between state-owned enterprises and private housing enterprises in the recovery of sales. Jin Tailun pointed out that under the policy support, some state-owned enterprises have begun to become regular month on month and year on year, but the sales of private housing enterprises have not improved significantly, with an average year-on-year decline of about 40%. It is estimated that private real estate enterprises account for about 80% of the industry. At present, their main goal is to destock and complete existing projects. At this stage, there is no condition to invest in new projects. He believes that the low investment of real estate enterprises will continue.

Jin Tailun pointed out that the current national policies for property market relief, including the relaxation of the financing end, have a positive effect, but high-quality private enterprises and state-owned enterprises have benefited more than some private enterprises with risks. I believe that it will be more meaningful if they can bring about recovery in the actual or sustainable financing of the private sector that has been out of danger or as a whole.

Jin Tailun also stressed that the large-scale recovery of new house sales is the biggest key to affect the recovery of the industry and private enterprises, and the demand and confidence of house buyers are largely based on worries about employment prospects and economic environment, which may depend on whether China's epidemic prevention measures can relax, otherwise, although the existing policies have the role of stabilizing the liquidity of real estate enterprises, it is still difficult to say that they can become the inflection point of the industry.

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