Summary:
Real estate stocks rose strongly on Friday, driving the premium and volume of real estate theme ETFs. Real estate theme funds also led the industry. Behind the central bank's "epic" campaign is the shocking data of real estate published by the National Bureau of Statistics. What will happen if the real estate industry recovers to the level of 2023? As the ancients said, the onlookers are clear.
1、 Real estate stocks rose strongly on Friday, driving the premium and volume of real estate theme ETFs. Real estate theme funds also led the industry.
On the afternoon of May 17 and Friday, stimulated by the four major policies of real estate, the real estate sector continued to soar in the afternoon, and the real estate stocks broke out across the board. The real estate index rose by more than 7%, and the weekly increase was far ahead of the market, reaching 12.65%. In terms of individual shares, more than 20 shares of Vanke A, Gemdale Group, etc. actually went up and down; 59 real estate stocks rose more than 6%.
The sharp rise of mainland real estate stocks also led to the sharp rise of Chinese real estate stocks in the United States. After the opening of Fangduoduo, the increase expanded to 323.77%, triggering the circuit breaker. Trading was suspended again shortly after the resumption of trading. By the end of the day, Fanduoduo had risen by more than 300%.
Real estate stocks rose rapidly in the late trading, which also stimulated the premium and large volume of real estate theme ETFs. The real estate themed ETF takes the lead in the whole ETF performance. Among them, the ETF of Yinhua Real Estate was close to the ceiling, with a growth rate of 9.49%, a premium of 1.71%, and the ETF of Huabao Real Estate rose by more than 9%, with a turnover of 215 million, hitting a record high. The largest real estate ETF in South China rose by 8.53%, and the turnover exceeded 1 billion yuan. In addition, the ETF of Huaxia Real Estate also increased by 7.65%.
After updating the net value of funds on Friday night, real estate theme funds also led the industry. Among them, China Merchants CSI 300 Real Estate, Huabao CSI 800 Real Estate ETF and Yinhua CSI Mainland Real Estate Theme ETF increased by more than 8%. In fact, in terms of returns, the launch of the real estate sector has lasted for a month, and several real estate theme funds have increased nearly 30% in the past month.
Fund managers and stock analysts have already predicted this wave of real estate speculation, magnifying the bull market space of the entire real estate industry and investment opportunities in real estate related industries. They believe that with the continuation of the loose tone of policies at both ends of supply and demand, the supply side clearing under financing support has basically ended, and the demand side policy has stimulated or guided the stability and repair of the fundamentals. There is a short-term opportunity for rebalancing the supply and demand relationship in the industry. At the same time, the reconstruction of urban villages and the construction of affordable housing are expected to provide incremental space for the industry.
They also believe that while paying attention to investment opportunities in the real estate industry, they should also pay attention to relevant investment opportunities, such as household appliances and consumer building materials.
2、 Behind the central bank's "epic" campaign is the shocking data of real estate published by the National Bureau of Statistics.
Within one day on Friday, the Central Bank launched a series of "epic" moves, lifted the lower limit of housing loan interest rate policy, lowered the interest rate of provident fund loans, the lower limit of the lowest proportion of first homes in history, and the Central Bank will set up 300 billion yuan of affordable housing refinancing. These four moves are interpreted by most investors and fund companies as being committed to the housing battle under the policy of exceeding expectations. The policy thinking of real estate has shifted from the supply side to the demand side, and focused on de stocking. The real estate is expected to stop falling and rise again.
Only a few people, such as Sanlang, believe that even the four major measures of the central bank are not to solve the demand side, but to stand on the supply side and misread the ability of the demand side, hoping to continue to promote the demand side to improve the supply side. If we fail to solve the problem of the national income structure tilting towards the income of residents, and the problem of high debt ratio and super high debt burden of the household sector, no policy can really promote the improvement of real estate demand and the stabilization and recovery of real estate.
However, many people do not agree with such a view. They believe that the market has given the answer to the effect of the policy and the rise of real estate assets in the investment market. The logic behind this is that the central bank has expressed its attitude, and the policy and intensity can be adjusted subsequently. After the market's expectations of real estate are less pessimistic, it is beneficial to the overall risk appetite.
Sanlang wants to remind those who hold these views that real estate has flourished for 30 years but failed for 3 years. If the contradictions accumulated over the past 30 years are cured by the central bank's four strategies that do not involve the income distribution structure, debt risk tolerance and deep contradictions in the economic structure, it must be a classic economic policy handed down from generation to generation. Pan Gongsheng, President of the People's Bank of China, must be the next winner of the Nobel Economic Prize after Ben Bernanke, the former chairman of the Federal Reserve.
In fact, on Friday, the National Bureau of Statistics released a series of data on real estate investment, sales volume and price of commercial housing fell sharply.
From January to April this year, the national real estate development investment was 3092.8 billion yuan, down 9.8% year on year; Among them, housing investment was 2339.2 billion yuan, down 10.5%.
The newly started housing area was 235.1 million square meters, down 24.6%. Among them, the newly started residential area was 170.06 million square meters, down 25.6%.
The completed housing area was 188.6 million square meters, down 20.4%. Among them, the completed residential area was 137.46 million square meters, down 21.0%.
The sales area of new commercial housing was 292.52 million square meters, down 20.2% year on year, of which the sales area of residential housing was down 23.8%. The sales volume of newly built commercial housing was 2806.7 billion yuan, down 28.3%, of which the sales volume of residential housing dropped 31.1%.
Real estate enterprises paid 3403.6 billion yuan this year, down 24.9% year on year. Of which, the deposit and advance payment were 100.2 billion yuan, down 37.2% year on year; Personal mortgage loans amounted to 495.3 billion yuan, down 39.7% year on year.
Only the area of commercial housing for sale increased to 745.53 million square meters, up 15.7% year on year, due to the decrease in the completion of construction in progress and sales. Among them, the residential area for sale increased by 24.5%.
Since the national real estate investment turned to negative growth in April 2022, it has not turned to positive growth so far. The decline in the first four months of this year has exceeded that of last year.
From the perspective of sales indicators, in 2019, the sales area of commercial housing nationwide was 1.716 billion square meters, and the sales volume of commercial housing was 15.97 trillion yuan. During the epidemic period in 2020 and 2021, the sales area and sales volume will both exceed 1.7 billion square meters and 17 trillion yuan.
In 2022, the sales area and sales volume of new commercial housing will be 1.358 billion square meters and 1.333 trillion yuan respectively.
In 2023, the sales area and sales volume of new commercial housing in China will be 1.117 billion square meters and 11.66 trillion yuan respectively.
If this trend continues, the sales area and sales volume of new commercial housing in China this year may fall below 900 million square meters and 9 trillion yuan, respectively 89500 square meters and 8.4 trillion yuan. Compared with that before the epidemic, it has dropped by about half.
3、 What will happen if the real estate industry recovers to the level of 2023?
According to the situation from January to April, this year residents need to pay about 1.68 trillion yuan of down payment for house purchase, and 6.72 trillion yuan of new bank loans.
If the sales of commercial houses in 2024 are to be equal to that in 2023, 222 million square meters of houses will be sold in the next eight months of this year, and the residents will pay an extra 3.26 trillion yuan. 15% down payment, 489 billion more cash, and 2.771 trillion more loans.
In total, residents need to pay 2.169 trillion down payment and 9.491 trillion new loans.
In 2023, the debt income ratio of Chinese residents has reached 143.4%. This is 33 percentage points higher than the 110% in the United States. The interest income ratio of residential loans is about 6.9%, 60% higher than that of American household loans of 4.2%.
If the growth rate of residents' income remains unchanged, this will cause at least the following three consequences:
First, this year's household consumption will be reduced by at least 489 billion yuan, which will directly affect the reduction of retail sales of social goods by more than 1%. In April, the growth rate of retail sales of social goods fell to 2.3%.
Second, the debt of the household sector will increase from 79.26 trillion yuan in 2023 to 88.751 trillion yuan, an increase of 12%. The income rate of residents' debt will increase from 143.4% to 154.2%, and the interest income ratio of residents' loans will exceed 7%. The debt risk of the residential sector will deteriorate sharply, the proportion of supply cuts will increase significantly, and the number of houses auctioned by law will increase significantly.
Third, since the growth rate of the loan balance is about twice that of the income, and the loan balance is 154.2% of the income, the newly increased amount of monthly repayment of principal and interest will affect the annual growth of retail sales in the future, reducing by 2 percentage points.
In fact, the impact is far greater. Because someone calculated, the down payment was reduced and the monthly payment was higher!
One netizen said that if it was in Shanghai, for a 10 million yuan house, 30% of the down payment was required before. For a 30 year loan, the down payment would be 3 million yuan, and the loan would be 7 million yuan. The monthly repayment would be about 32000 yuan, and the total principal and interest for 30 years would be more than 11 million yuan.
Now the down payment has been reduced to 15%, which requires 1.5 million yuan, 8.5 million yuan of loans, 41000 yuan of monthly repayment, and more than 14 million yuan of 30-year principal and interest.
In fact, the down payment has been reduced because the increased loan part needs to pay 30 years more interest, and the total house purchase expenditure of the house buyers will increase by 3 million yuan, about 27%. According to the 30-year average, if the annual expenditure increases by 100000 yuan, the family is bound to reduce consumption by 100000 yuan every year.
Our consumption cannot afford it. On the one hand, the proportion of income in GDP is about 20 percentage points lower than the world average. On the other hand, our residents' debt burden is more than half of the world average.
When choosing between consumption and real estate, if you put the weight on the side of real estate, consumption will be greatly damaged. The final result of consumption damage is oversupply and overinvestment.
Therefore, the down payment ratio of 15% for the first set and 25% for the second set is unprecedented, but the negative impact on consumption and economic structure will also be unprecedented.
4、 As the ancients said, the onlookers are clear.
Policymakers' good intentions are: I will reduce the down payment for you and the loan interest rate for you, so you can quickly buy a house.
But he ignored one basic fact that should not be ignored: despite the general environment in the past few years, people who can afford to buy houses still can afford to buy houses. They have N suites, and this policy cannot effectively promote the purchase of these people; According to their income, people who can't afford to buy a house will still be unable to buy a house if the house price does not continue to decline by 30% or 50%, and they can't afford to pay the down payment because they know that the down payment burden is gone, and they can't afford the monthly payment. After all, you have to pay off the money you borrowed, and you can't get out of debt.
In fact, the core problem of real estate is to increase the income of low - and middle-income groups, and to lower the house price and land price! Apart from these two, there is no shortcut.
Therefore, while the four major real estate policies were implemented on Friday, the view of the Mall on China's real estate sector was lowered from "attractive" to "consistent with the market".
Standing outside the chess game, Damo said that although Chinese property stocks have soared about 50% since mid April, driven by policy easing and improved investor sentiment, the fundamentals are still weak, and the uncertainty in the second half of the year is high. The rating of Longhu Group and Poly Development was lowered from "overweight" to "synchronization with the big market".
[Author: Xu Sanlang]
