Property Market Outlook In 2020: Where Will The Market Go After "Historical Top"?

What will happen next when the sale scale of the property market is about to record for four consecutive years and is likely to reach its all-time high?

In the first half of October this year, sales of national commercial housing reached 12 trillion and 440 billion, maintaining a year-on-year growth rate of 7.3%, not far from the 15 trillion level of last year's whole year. Over the same period, the total sales area of commercial housing for the first time exceeded that of last year. Considering that the end of the year is the key period for housing companies to impact annual performance, the scale of real estate sales this year is likely to reach a new high.

From 2016 to 2018, the sales area and sales volume of national commercial housing has been refreshed for three consecutive years.

Recently, various brokerages and agencies have released the strategy report of the real estate industry in 2020, analyzing the market trend after the "historical peak". Among them, sales downlink, investment cooling, house price stabilization become the main judgment of the organization.

In addition, with the normalization of regulation, the property market is likely to enter a longer downward cycle. During this period, the internal changes in the industry are surging, sector rotation and industry reshuffle will continue. And the rise of the stock market will also be the main theme of the coming years.

Volume and price stability

This year's national real estate regulation policy is mainly concentrated in the two or three quarter. Since May, regulators have made a number of policy statements to supervise the financing of real estate. Affected by this, financing channels such as trust and private placement have been greatly restricted, and the auditing process of bank development loan has also tended to be strict. The July 30th meeting of the Political Bureau of the CPC Central Committee once again stressed that the housing sector did not fire, and for the first time put forward "no real estate as a short-term stimulus to the economy".

Since the fourth quarter, some cities have relaxed the market regulation in disguise. Although regulators did not make a stand on the property market policy, agencies generally believe that the real estate regulation policy is not loose.

Pacific Securities pointed out that policymakers' determination of the current round of real estate regulation is very firm. Even under the pressure of steady growth pressure, they do not intend to substantially relax the real estate policy. The agency believes that the current policy environment is very similar to that of 2012, and many cities have issued a fine tune for the real estate policy, but once the relaxation rate is too large, they will be stopped immediately. "For the real estate resolute regulatory attitude or will remain in a longer period of time, especially housing enterprises financing policy loosening possibility is smaller."

Soochow securities also said, "looking forward to 2020, there is no need to place too much hope on the overall looseness of regulation and control. At present, the real estate market is slow and stable. The policy of the real estate industry in the future will tend to be stable, and the policy will adjust the market situation in a reverse cycle.

In the case of stable policy expectations, the future market will also slowly enter the downlink period. Most agencies believe that next year's real estate transaction area will fall.

But the agencies do not quite agree on the forecast of the housing market cooling down. Everbright Securities is the most pessimistic. It believes that next year, the total area of commercial housing sales will fall by 8.5%. The most optimistic group believes that next year's sales area will be flat this year, that is, between 170 thousand square meters and 180 thousand square meters.

In terms of price, because the government departments in many cities have limited restrictions on housing prices, agencies generally believe that the future trend of house prices will be stable, neither will it rise nor fall too fast.

Pacific Securities pointed out that in terms of volume, 2019 will be the "historical top" of the new housing market, and the downward trend in the next few years will be the trend of the times. The agency pointed out that over the past three or four years, the number of new housing transactions has exceeded expectations in recent years. In addition to the catalytic effect of monetization, the main force of transaction is actually the future urbanization demand of overdraft. The demand for new houses in the future will slowly return to the central level of 1 billion 100 million -12 billion square meters per year.

In addition, due to restrictions on financing channels, future housing prices will also be cautious in investment. Agencies generally believe that next year, the national real estate investment growth will fall from two digits to single digit, if the policy is strict, the growth rate may fall below 5%.

Wheel and shuffle

While the market is heading for a downward trend, the internal changes of the real estate industry are still surging.

Most agencies believe that the dividend of the shed will continue to play a role in the three or four line property market and ensure that the overall market will not be substantially reduced. But from the point of view of plate rotation, a second tier city will become a hot market in the future. Among them, due to the relatively stringent control policies of the first tier cities, the second tier city market is worth looking forward to.

Everbright Securities forecast that from the sales area, next year the first tier cities will be flat, the second tier cities will grow by 10%, and the three or four tier cities will be reduced by 16%. From the sales amount, the first tier cities and second tier cities will grow by 10% and 13% respectively, while the three cities will be reduced by 16%.

At the same time, as the regulation continues, the advantages of large housing enterprises in financing and land acquisition are more and more obvious, which will further aggravate the industry reshuffle.

Shanghai Yi Ju Research Institute pointed out that with the further strengthening of the risk prevention and control of the real estate industry, some local governments have requested developers of a certain scale to carry out development when they take the land, and the land auction has to pay a large amount of deposit, which puts forward higher requirements for the operation ability and decision-making ability of small housing enterprises. Because the housing enterprises' fault tolerance rate is lower, further squeezing the survival space of small housing enterprises, some small housing enterprises with poor strength will eventually be merged or go to the brink of bankruptcy.

In recent years, the concentration of the real estate industry has been accelerating. According to the report of Huachang securities, in 2019 1-10, the sales volume of the top 50 Housing enterprises reached 7 trillion and 500 billion yuan, accounting for more than 60% of the total commercial housing sales in the country, while in 2011, the proportion was less than 20%. During this period, the sales of the top 30 Housing enterprises increased from 15% to 50%, and the sales of the 10 strong housing enterprises increased from 10% to 30%.

Zhang Dawei, chief analyst of Zhongyuan Real estate, told the twenty-first Century economic report that the differentiation of the real estate industry will continue in the market downturn. At present, the comprehensive advantages of the head housing enterprises are very obvious, and the location is relatively stable. The scale of housing prices between 50 billion and 200 billion has already split up, and some enterprises are catching up, but some of them are not enough.

Pacific Securities concluded that industry concentration will evolve from "spring and Autumn" stage to "Warring States stage". The merger of large housing enterprises will be transformed from micro Housing enterprises (only a few projects of Housing enterprises) to 100 strong housing chains with tight capital chains.

In addition, the rise of the stock market is also worthy of attention. Huachang Securities said that from the aspect of format, property management, commercial real estate and industrial real estate have broad growth space, and are expected to become new growth points outside the traditional business of Housing enterprises. The agency expects that the scale of the property management industry will reach 2 trillion yuan in 2030, which is expected to double by now. Huatai Securities also holds the same view that there exists trillions of market space in property management and commercial real estate.

On the other hand, at present, the number of second-hand housing transactions in nearly 30 cities across the country has exceeded the number of new houses, and the number of second-hand housing transactions may continue to increase. Most agencies believe that many cities will appear "second-hand housing squeeze new houses" phenomenon, which will spawn the rise of a large number of real estate brokers. For developers, in the medium to long term, we should pay attention to the shrinking of hot urban market space.