On the morning of August 11, real estate stocks rose sharply, and netizens shouted “finally proud”! On the news side, it was recently circulated on the Internet that the closed door meeting held by the Ministry of natural resources clarified the adjustment of land transfer policies in the second batch of core cities.
Since this year, various cities, especially the first tier cities, have tightened the regulation of the real estate market, resulting in continuous adjustment of the real estate sector and becoming the “sad ridge” of a shares. Especially since July, under the central government’s repeated tone of “no speculation in housing” and the goal of three stability, the real estate market has ushered in a new round of regulation and control. Even song Du shares, a listed company, did not hesitate to lose a deposit of 50 million yuan, but also returned a homestead obtained from its first centralized land supply in Hangzhou, which triggered a heated discussion in the industry and market.
However, in the context of tighter real estate regulation, real estate stocks recently reversed the decline and rose again and again. Today, they even opened and went up sharply in large quantities. The plate index once soared by nearly 5%, and the half day transaction exceeded all the transactions yesterday. CCCC real estate pulled the daily limit in a straight line only about 7 minutes after the opening. Jindi group and Poly Real estate also touched the daily limit. Vanke A, the market value of the real estate sector, once increased by more than 9%, with a cumulative increase of nearly 20% since the bottom on July 27.
Hong Kong stock Hang Seng mainland real estate index soared by nearly 7% in early trading, and important real estate related indexes of Hang Seng property, Hang Seng real estate and real estate construction all rose sharply. Evergrande property soared by more than 15% and more than 50% in the past three days. China’s new towns, China Overseas Development and rongchuang China all rose sharply.
Favorable policies occur frequently
On the one hand, the valuation of real estate stocks is too low. Some institutions believe that the valuation of head real estate enterprises is far lower than that of banks, becoming the depression with the lowest valuation of a shares. As of today’s noon closing, the net breaking rate of the real estate sector has exceeded 50%, the lowest price to book rate of Fuxing shares is only 0.36 times, and the net rate of more than 10 stock markets such as Taihe Group, Huaxia happiness and Cinda real estate is less than 0.5 times.
On the other hand, real estate regulation has accelerated the concentration of the real estate industry, and large and super large real estate enterprises have further expanded their market share. According to the latest “top 200 sales performance of Chinese real estate enterprises from January to July 2021” released by China Index Research Institute, the average sales of top 100 real estate enterprises from January to July 2021 was 79.47 billion yuan, with an average growth rate of 36.2%; Among them, there were 21 real estate enterprises with sales of more than 100 billion yuan, an increase of 3 over the same period last year; 136 real estate enterprises with more than 10 billion yuan. Small and medium-sized real estate enterprises with sales exceeding 500 billion yuan, Vanke exceeding 400 billion yuan, CNOOC real estate exceeding 200 billion yuan and sales between 20 billion yuan and 30 billion yuan grew the fastest, reaching 44.8%.
The interest rate has a significant impact on the profits of high debt real estate enterprises. According to the data of China Index Research Institute, in July 2021, the total scale of real estate bond issuance increased month on month, and the financing cost decreased. Specifically, the issuance scale of real estate credit bonds in July was 65.22 billion yuan, an increase of 23.36% compared with 52.87 billion yuan in June; In July, the issuance scale of overseas foreign debt of mainland real estate enterprises was 37.29 billion yuan, an increase of 28.45% compared with 29.03 billion yuan in June. In terms of financing costs, the financing costs of credit bonds and overseas bonds decreased, of which the average interest rate of credit bonds was 4.17%, down 0.81 percentage points month on month; The average interest rate of overseas bonds was 6%, down 2.08 percentage points month on month.
The central bank’s second quarter monetary policy implementation report also confirms this. The central bank report shows that the growth rate of real estate loans in the first half of the year was generally stable. At the end of June, the balance of real estate loans of major financial institutions (including foreign capital) in China was 50.8 trillion yuan, a year-on-year increase of 9.5%. Among them, the balance of individual housing loans was 36.6 trillion yuan, a year-on-year increase of 13%; The balance of housing development loans was 9.4 trillion yuan, a year-on-year increase of 3.4%. By the end of June, the weighted average interest rate of loans was 4.93%, a new low since statistics; The weighted average interest rate of enterprise loans was 4.58%, down 0.06 percentage points from the same period last year.